Here is the Mortgage Rate Update for the week of December 1, 2008 brought to you by Larry Iest of Hemet Mortgage.
LAST WEEK
I hope you enjoyed a wonderful Thanksgiving weekend with friends and family. I certainly have much to be thankful for, including many wonderful clients and friends like you.
Last week was a big week for mortgage bonds and therefore mortgage rates. The Federal Reserve announced that they will now buy billions of dollars of mortgage back securities from the GSE's like Fannie Mae, Freddie Mac and Gennie Mae. This moved mortgage bonds higher and mortgage rates lower. Wednesday gave us more bond friendly news with the weekly jobless claims coming in a recessionary levels and personal spending falling by a record 1.0%. On the inflation front the Core PCE (Feds favorite inflation gauge) came in with an annual reading of a tame 2.1%. The stock market had a good week and that pulled some of the money out of bonds and into the stock market. Mortgage rates still ended the week better than when it began.
THIS WEEK
This week has started off with a bang and an official announcement that we are officially in a recession, the National Bureau of Economic Research announced the economy fell into a recession beginning in December 2007. This was not big news to anyone but it always makes headlines when the government announces we are officially in recession.
On the news front this week the big report will be the Unemployment Report. with Jobless claims coming in so poorly last week it will be interesting to see the report released Friday. If the actual report varies much from forecasts I would expect a market mover. Another possible market mover will be the Feds Beige Book. This is a collection of regional reports the Fed uses in its meetings, the next Fed meeting will be December 16th.
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