Mortgage Market Update for the week of July 21, 2008

Here is the Mortgage Market Update for the week of July 21, 2008 brought to you by Larry Iest of Hemet Mortgage.

LAST WEEK

The word or threat of the week was inflation. You know the bond market hate inflation so when inflation is in the air the bond market is in trouble. That is exactly what happened last week. After Mondays news about the Fed's helping Fannie and Freddie the wave of inflationary news hit the wires. Tuesday the Producer Price Index (PPI) came it at the highest year-over-year level since 1981. That news started the bond market tumbling. Wednesday we got the report on Consumer Price Index (CPI) this year-over-year level came in at 5% which was another historic rise. All of this inflation news sent the bond market diving lower and mortgage rates increasing.

THIS WEEK

This week we have a light economic calendar. We will have reports on the consumer, Durable Goods and a read on the housing market. New and Existing home sales reports will be released and sales are expected to be sluggish. Consumer sediment will be released on Friday. The consumer has been extremely resilient in the face of higher food and oil process so this will be an interesting report. Also on Friday we are expecting the durable goods orders report which measures orders for items that will last longer than three years. We are also in the middle on earnings season for public companies. During earning season the stock market can change direction on a dime and add volatility to the bond market. we are all hoping the bond market can fight back this week and lift of itself from the lows we saw last week.