Weekly Mortgage Newsletter

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As expected, mortgage rates held fairly steady last week, as markets looked forward to this week’s
Week of important events. GDP did rise slightly as expected, and we had some positive news for housing.
Oct. 31, Both new and existing housing numbers did improve on a month-over-month basis. However, sales
2010 continue to remain at very low levels, with inventories of unsold homes remaining stubbornly high.
This week is a huge week for not only the mortgage industry, but also for the country as a whole. In
addition to the mid-term elections on Tuesday, the Federal Reserve meets this week to discuss
Mortgage monetary policy. Generally, the Fed attempts to remain apolitical, and does little around elections.
Market This week may be significantly different. Some analysts are anticipating the announcement of another
Commentary round of treasury and mortgage debt purchases. If this comes to pass, we will almost certainly see
mortgage rates moving downward again. However, if the Fed hints that it may consider raising rates
in the relatively near future, we could see rates trending upward as the week progresses.
This Week’s Top Economic Reports and Events 30Yr 15Yr 1Yr ARM

Mortgage Rates
Report/Event Date Prior Est. Impact
4.75%
ISM Manufacturing Index 11/1 54.4 53.6 Significant
After last month’s surprise reading, an increase in this index could 4.25%
generate some strong upward pressure on mortgage rates on Monday.
3.75%
ISM Service Index 11/3 53.2 53.6 Moderate
If both ISM indices drop this week, we could see some downward 3.25%
pressure on all interest rates developing in the near term. 8/12 8/26 9/9 9/23 10/7 10/21
11,250.00
FOMC Policy Announcement 11/3 Significant
11,000.00
Dow Jones

This is a truly critical meeting of the Fed. The actions from this meeting 10,750.00
will likely set the overall trend for mortgage rates for the rest of the year.
10,500.00

Unemployment Rate 11/5 9.6% 9.6% Significant 10,250.00

There has been little evidence that employment is improving much. 10,000.00

Even a 9.5% is likely to be met with little enthusiasm this month. 9,750.00
6-Aug 20-Aug 3-Sep 17-Sep 1-Oct 15-Oct 29-Oct
Nonfarm Payrolls 11/6 -95K 45K Significant
If the Fed hints at a future increase, and the unemployment rates drops, 9.00
Historical Rates

with an increase in payrolls, we will see mortgage rates increasing soon.

6.00
Mortgage Rate Interest Rates and Indexes
Trends 1 Yr T-Bill 0.220% 11th D. COFI 1.753% 3.00

2.5400
Short-Term ÎÎ 10 Yr T-Note COSI 2.230% 0.00
% Oct-05 Oct-06 Oct-07 Oct-08 Oct-09

Long-Term ÎÎ 6 Month Libor 0.448% CODI 0.298% 1 Yr CMT MTA COFI

CODI Prime
Volatility High Prime Rate 3.250% MTA 0.342%
10 Year Treasury Note Trend
3.00
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