Mortgage Rates Predictions

June 12, 2008 | Mortgage Rates continue to climb on Retail Sales numbers…

After yesterdays Mortgage Bond rally to push rates lower, today’s very strong Retail Sales numbers for May quickly reversed the momentum.  Retail Sales in May reported a 1% increase and without Auto Sales the increase was 1.2%.  Mortgage Backed Securities hate inflation and dislike “good news.”  Also reported today was Initial Jobless claims which were worse than expected at 384,000.  Mortgage Bonds are seriously hurting.  We are now starting to monitor the 6.000% FNMA Mortgage Bonds since they more accurately reflect current mortgage market conditions.  The 6.000% Mortgage Bonds are -44bp on the day at 99.97.  The Fed needs to get control and start raising short term money to take some steam out of the stock market and drive Long Term Fixed rates down to a reasonable level.