Weekly Mortgage Newsletter

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As economic growth seems to be gaining a stronger footing, with inflationary pressures almost certain
Week of to rise, mortgage rates will eventually increase. However, global geopolitical concerns and increasing
March 6, oil prices have helped push mortgage rates downward for the last two weeks. Last week’s economic
2011 news was very upbeat. The unemployment rate fell again to 8.9%, with almost 200K jobs added last
month. The ISM Manufacturing Index climbed to 61.4%, the highest level since 2004, and the ISM
Services Index jumped to 59.4%, the highest reading since 2005.
Mortgage This week is much lighter in terms of economic data, with only one significant report due. Retail
Market Sales is due to be released on Friday. For the first part of the week, stocks markets and technical
Commentary issues may be more of a driver of rates. If international tensions continue to increase, rates might
move downward a bit. However, positive retail sales data on Friday would most likely reverse any
downward movement in rates during week, especially if sales growth was greater than 1.0%.
This Week’s Top Economic Reports and Events 30Yr 15Yr 1Yr ARM

Mortgage Rates
Report/Event Date Prior Est. Impact
Consumer Credit 3/7 6.1B 3.3B Limited 5.00%

Consumers are beginning to be more confident in borrowing. The more 4.50%

credit increases, the more upward pressure rates will experience. 4.00%
Weekly Jobless Claims 3/10 368K 382K Limited 3.50%
The longer this reading stays below 400K, the more upward pressure 3.00%
rates will feel, with even more upward pressure below 350K. 12/16 12/30 1/13 1/27 2/10 2/24
12,500.00
International Trade Balance 3/10 -40.6B -41.5B Limited
12,250.00
Dow Jones

If the trade gap shrinks rather than grows, we could see some very minor
upward pressure experienced by mortgage rates. 12,000.00

Retail Sales 3/11 0.3% 1.0% Significant 11,750.00

Consumers are showing signs of confidence. If that falters, and sales dip 11,500.00

rather than rise, rates will experience some downward pressure. 11,250.00
8-Dec 22-Dec 5-Jan 19-Jan 2-Feb 16-Feb 2-Mar
U of Mich. Consumer Sentiment 3/11 77.5 76.5 Moderate
9.00
With so many signs pointing toward economic strength, a surprise
Historical Rates

revision upward would help generate more upward pressure on rates. 6.00

Mortgage Rate Interest Rates and Indexes

3.00
Trends 1 Yr T-Bill 0.270% 11th D. COFI 1.484%
Short-Term ÎÎ 10 Yr T-Note 3.460% COSI 2.220% 0.00
Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
Long-Term ÎÎ 6 Month Libor 0.463% CODI 0.319% 1 Yr CMT MTA COFI
CODI Prime
Volatility High Prime Rate 3.250% MTA 0.312%
10 Year Treasury Note Trend
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