Wilshire Weekly Mortgage Rate Update January 15, 2008

Where We’ve been:
Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading was within a relatively narrow range. There were very few data releases. Stocks dominated the financial markets as news of continued economic uncertainty tied to the credit crunch dominated the headlines. There remained concerns that the economy is heading into a recession.

Where We’re At:
For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point.

Consumer price index data Wednesday will be the most important event this week. With an abundance of additional important data releases scheduled the potential for market volatility is high.

Where we’re Going:
The abundance of fundamental data this week provides a good opportunity for mortgages to improve. If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally resulting in mortgage interest rate decreases. However, if the data shows that the economy is rebounding or any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.

Forecast: Mortgage interest rates remain favorable. Now is a great time to avoid the uncertainty surrounding continued market volatility so locking in your rates for security in closing within the next week.