Mortgage Market Commentary

This week is light on economic reports, as investors will be focused on the large Treasury auctions June 9-11, particularly the longer term 10yr and 30yr offerings Wednesday and Thursday. With recent economic data generally favorable, investors believe the Fed will not increase it's purchases of MBS (mortgaged backed securities) or Treasuries, so the level of demand for the new bonds will be closely watched. The most significant economic data will be the Retail Sales (which account for 70% of economic activity) report released on Thursday, along with Jobless Claims and Business Inventories. Wednesday is the day for the Mortgage Bankers Association's weekly survey of mortgage applications which provides information on purchase activity and refinance demand. 30yr fixed mortgage rates jumped last week to 5.45%, from a low of 4.85% in April; which may sideline consumers planning to refinance or purchase their first home. Costs are now higher for home buyers than they were in December. However, great 1st time home buyer incentives still exist and will off set any increase to rate and costs. Also, with the price of homes still dropping, NOW IS STILL THE TIME TO BUY!!