4 June 2010 – Coming out of the Memorial Day weekend, mortgages were, for the most part, flat this week. There was no shortage of economic data, however, with reports on mortgage applications from the Mortgage Bankers Association and pending home sales from the National Association of Realtors. Additionally, the Labor Department issued job growth and unemployment statistics.

Mortgage data was a mixed bag, which actually matched expectations. Applications for purchase mortgages were off by 4.1%, but the recent drop in rates bolstered refinance applications by 2.4%. In short, rates are still good, but buyers are looking for bargains. The now expired Federal Homebuyer’s Tax Credit had provided a catalyst for buyers to make the decision to pull the purchase trigger, but without the perceived bargain, demand has stalled. Pending sales of homes followed the same expected trend. As many forecasted last month, the last minute efforts by buyers to take advantage of the National Homebuyer’s Tax Credit boosted the May pending home sales by 6%. The main take away to current buyers is that rates are still low and there is a supply of home that have not yet gone under contract.

Outside of the housing market, eyes were on the continued anemic labor market. While jobs were created, the increase of 55,000 lagged behind the expected 75,000. New claims for unemployment benefits dropped by 10,000, which represented a positive signal as conventional wisdom had pointed to half that number. This data coupled with a mixed bag of reports on retail sales pushed stocks mildly lower, but not enough to influence mortgage rates. So, from a historical perspective, rates are still extremely attractive.