Market Update

Fed Chairman Bernanke announced on Capitol Hill last week that; a near-term reduction in the Fed’s purchase appetite for Treasury debt and mortgage-backed securities has not been pre-ordained and any cut in spending will be data driven – not calendar driven. It is no longer a matter of “if” the Fed will taper their monthly purchases – it is a matter of when and by how much.

Volatility around the release of forthcoming major economic reports will almost certainly be higher than anything we've seen in some time. 

The results of Wednesday's and Thursday’s Treasury note auction will likely have an influence on current trend trajectory. A strongly bid 5- and 7-year note auction will probably prove supportive of steady, to perhaps fractionally lower mortgage interest rates. While weak demand for one or both of these offerings will almost certainly prove mortgage interest rates unfriendly.

Rates

Loan Amount < $417k

 *   Conv 30yr Fixed - 4.250%

 *   FHA 30 yr Fixed - 3.875%

   Loan Amount > $417k and < $625,500

 *   Conv 30yr Fixed - 4.500%

 *   FHA 30 yr Fixed - 4.125%

  Loan Amount > $625,500

 *     Jumbo 30yr Fixed - 5.000%