HEADS UP!  I will be leaving on vacation this Friday the 7^th and returning Monday the 24^th.  In my absence, my friend and co-worker Becke Reid (becke@accessloans.net 897-4090 office 228-2497 cell) will be taking all new business calls and watching/overseeing existing transactions.  She is the best, well second to myselfJ  Please continue to send business while I'm away.  Thank you!

The mortgage market is holding on to some modest upside price gains this morning.  In the convoluted world of bonds and mortgage-backed securities news of economic weakness tends to be supportive of steady to slightly lower mortgage interest rates.  The "why" behind this phenomenon is pretty straightforward.  Slumping economic activity leads to a reduction in the demand for capital -- which ultimately leads to lower short- and long-term interest rates.

Earlier today the Institute of Supply Management said its index of national factory activity fell to a reading of 38.9 in October from 43.5 in September.  No big surprise here really - since the credit squeeze in the short-term credit markets has made it virtually impossible for companies to acquire the capital necessary to cover manufacturers' costs.  Credit market conditions are improving at a snail's pace - so mortgage investors are keenly aware that it will be months yet before activity levels in the manufacturing sector begin to improve significantly.

The big events remaining on this week's calendar include Wednesday's market response to tomorrow's election results -- and Friday's October nonfarm payroll report.   Market participants have largely discounted the outcome of the Presidential race - but will likely be "bummed" (at least temporarily) if complete voting control of Congress winds up in the hands of one party.   Expectations for a really, really ugly nonfarm payroll number (-200,000+) on Friday are running high.  The consensus outlook has been completely priced-into the current mortgage market.  In the very unlikely event the headline number is stronger-than-expected (say a job loss of 150,000 or less) and/or the national jobless rate comes in at 6.1% or less - the mortgage market will be vulnerable to a sharp decline in price and an upward surge in rate.  The probabilities strongly favor a number that closely approximates the consensus estimate - which means Friday's much anticipated employment report will likely be a non-event as far as its impact on the direction of mortgage interest rates is concerned.

 

Today's conforming 30 year fixed rate is at 6.50%.