3 November 2009 ? Bonds opened down 19bps and have somewhat recovered to a current afternoon change of down 12bps. Wednesday marks the Fed?s two-day Federal Open Market Committee meeting. Many speculate that the Fed will leave rates at their current levels, but the meetings may indicate when the Fed plans on beginning the inevitable hiking of rates. As the Fed reduces its buying of Mortgage Backed Securities throughout the program?s remaining 22 weeks, we expect the rates to begin their rise. Of the $1.25 trillion established, nearly $977 billion have been purchased. The stock market has remained flat throughout the day with the Dow, Nasdaq and S&P 500 occasionally moving back and forth between the green and red. The highlight of the day was the acquisition of railroad operator Burlington Northern Santa Fe Corp for $26 billion by renowned financier Warren Buffet and his Berkshire Hathaway company. With the impending Fed meetings, the dollar has risen modestly as investors continue to sell risky stocks and assets. It will be interesting to see how the market performs the rest of the week as many companies continue to report 3Q results. Traditionally, November has been a strong month for investors as the holiday seasons are around the bend. Mortgage Rates do remain strong with 4.75% (4.83 apr) on the 30 year and 4.375% (4.423 apr) on the 15 year.

16 October 2009 ?Bonds opened at 3bps today and have increased to 19bps this afternoon. If this holds, we may see the bonds continue to improve in the next few days. The rates have risen sharply from previous lows.

Weaker than expected sales from GE and IBM have driven the Dow down 130 points today. Bank of America also posted its first loss of the year that came in worse than analysts predicted. As I mentioned on Wednesday, it would surprise few people if the stock market pulled back a bit – something that will help the bond market.

The New York Federal Reserve has begun to cut back on its purchases of Mortgage-Backed Securities. The New York Fed bought only $16.1 billion worth of these securities this week, down from $20 billion in the previous week. Year-to-Date, the Fed has purchased $944 billion worth of these securities. The Fed has allotted a total of $1.25 trillion for the program which is set to expire March 31st, 2010.

Consumer Sentiment was reported at 69.4, lower than expectations of 73.5. Analysts believe the drop in sentiment reflected the current trend among consumers to increase personal savings and pay down household debt.

Mortgage rates are still solid right now, 4.75% (4.83 apr) on the 30 year, 4.375% (4.423 apr) on the 15 year.

8 October 2009 ? The bond market started out on Wednesday up 25bps, partly due to the retreat in the stock market after a two-day rally on Monday and Tuesday. While bonds retreated during the day, they made a strong move after the successful 10-year Treasury auction. The mortgage bonds are near a very important level of resistance so while rates have improved, we may see a reversal in this if the bonds can not break the resistance level that it is currently testing. Mortgage applications reached a four month high last week as mortgage rates are at all-time lows which I have reported in the past week. Again, please review your mortgage situation, the 10/1 ARM and 30-year fixed are outstanding products at this time.

Today we will have a $12 billion 3-year T Note auction which we will watch closely while also seeing what how the stock market reacts to 3rd quarter profit reports.

Rates as of 10/7/2009:

? 30Yr Fx 4.625% (APR 4.662)

? 15Yr Fx 4.25% (APR 4.314)

? 5/1ARM 3.75% (APR 3.618)

? 7/1ARM 4.25% (APR 3.886)

? 10/1ARM 4.25% (APR 3.999)

5 October 2009 ? Today the bonds opened up 9bps and they have rallied most of last week to bring mortgage rates to previous all time lows once again. If you are interested in refinancing, now would be the ideal time to contact your mortgage professional. The economic news has not been so great over the past week with a variety of reports confirming that a recovery to this recession will be quite long way off. The housing market will have to stabilize and the unemployment is a huge concern. Take advantage of this situation, as potential buyers or someone who has not reviewed their mortgage situation as now is the lowest the rates have ever been!

RATES:

• 30Yr Fx 4.625% (APR 4.662)
• 15Yr Fx 4.25% (APR 4.314)
• 5/1ARM 3.75% (APR 3.618)
• 7/1ARM 4.25% (APR 3.886)
• 10/1ARM 4.25% (APR 3.999)

30 September 2009 ? The monthly ADP Report, which gives us a look at the private sector job market showed private employers cut 254,000 jobs in September, worse than the 200,000 which was expected. This release, as I have mentioned in the past, does not always match up with the Labor Department?s official Jobs Report, but this news doesn?t fair well for this Friday?s important Job?s number. Right now economists are estimating a loss of 180,000 jobs for the month of September. To discuss the Job?s number here is a brief summary of what we are up against. The population is growing, so the number of people looking for jobs is increasing. There are 150 million people in the workforce, and that number grows by about 1% per year (1.5 million), just due to the population growth. To just keep pace with that, the US needs to create about 125,000 jobs per month. A loss of 200,000 jobs is actually a loss of 325,000 for just one month because we are falling behind on the job creation that is necessary. The unemployment rate is really much higher than what is reported and will continue to weigh down the economic recovery. Stocks should stay in check due to the jobs issue which will keep bonds in check and mortgage rates should remain stable for the time being. This will stay true until inflation becomes a concern which would represent a hard time as high unemployment and inflation together would create a challenging environment.

For now, everyone should review their mortgage and debt position to see if they can lower their payment. If they can lower their payment they may want to opt to put the money that they can save towards the principal balance of their loan essentially cutting off between 3 and 15 years of their mortgage.

Rates are incredibly good right now, 4.75% (4.83 apr) on the 30 year, 4.375% (4.423 apr) on the 15 year.

28 September 2009 ? The mortgage bonds were down 12bps this morning, but are currently up 12bps. Trading has been light today because of the high Jewish holy day of Yom Kippur. There are no economic reports today and there are no Treasury auctions scheduled for this week. Friday the Jobs Report will be released and Thursday the Treasury will announce the auctions for the following week. The Dow is up 134.

The 30 year rate is at 4.875% (apr 4.909) and the 15 year rate is at 4.375% (apr 4.433).

25 September 2009 ? Today the bond market opened up 3bps and continued to improve and is currently at 15bps. Durable Goods Orders for August unexpectedly fell 2.4% for the largest decline since January. This was a big miss from projections, as mentioned in previous updates, the increase in orders may have been inventories falling to all time lows and it was a one-time replenishing. We will continue to pay close attention to this number going forward. With a weak labor market and anemic wage growth, consumers are not making a lot of Durable Goods purchases. Durable Goods are big ticket purchases meant to last more than three years, for example, flat screen TV?s, furniture and appliances. Until we see the labor market improve we are not likely to see improvement in Durable Goods Orders.

Consumer Sentiment was reported at 73.5 better than expectations of 70.5. This improvement is probably a direct result of the huge rise in the stock market. On another note, new home sales were reported at 429,000, which is slightly lower than expectations of 441,000. The inventory of unsold homes dropped slightly to 7.3% however I have stated before that the banks are holding onto foreclosures and we may see a whole new slew of sales coming onto the market.

The 30 year rate is at 4.875% (apr 4.909) and the 15 year rate is at 4.375% (apr 4.433).

24 September 2009 ? Mortgage bonds are higher this morning after the bonds had an extremely volatile day yesterday. The overall effect on bonds for yesterday were a light drop, which was a result of the poor treasury auction as I mentioned in Monday?s update. The bonds recovered when the Fed statement was released and it was announced the Treasury buying program will continue through March or 2010 to keep the mortgage rates hopefully a bit lower and continue to support the struggling housing market. Today inventory of unsold homes fell to their lowest levels since April of 2007 however we have to keep an eye on this number as many banks have held foreclosures and not listed them on the market, which is already saturated with too much inventory. Unemployment continues to be a problem with 530,000 new claims versus the 550,000 which was expected. Bonds are currently up 16 bps for the day.

The 30-year rate is at 4.875% (apr 4.909) and the 15-year rate is at 4.375% (apr 4.433).

15 September 2009 ? Mortgage Bonds opened down 28 bps. They are currently down 6bps as a result of some economic reports today. The bonds have been affected by much higher than expected wholesale prices, which can be a sign of inflation. The Producer Price Index (PPI…a measurement of inflation) rose 1.7% at the wholesale level, which is double the 0.8% expectations. PPI or wholesale inflation does not always get passed on to the consumer, which is the real inflation concern. We will get a much better read on this tomorrow when the Consumer Price Index (CPI) is released. One thing is for sure, once inflation arrives it always increases rates!

Consumers were spending last month and the retail sales rose by 2.7%, the largest increase in 3 years. However, most of the spending was generated from the Cash for Clunkers program, which has now ended. Excluding autos retail sales rose by 1.1%, which is better than the expected .4%.

The 30-year fixed is at 5% (5.055% APR), the 15-year fixed rate is at 4.5% (4.594% APR).

10 September 2009 ? The bond market is enjoying a nice rally right now and we should see rates improve this afternoon this is due to today?s $12 billion 30-year bond auction. The auction received an A+ rating from CNBC?s Rick Santelli. No major reports are due out again until Tuesday, September 15th which is when the retail sales report comes out. The retail sales report tracks the dollar value of merchandise sold by retailers to consumers. The results of this report can have a significant impact on rates.