Thursday 10/30 ... Reports are In

Today brought us a couple economic reports. First the Gross Domestic product, economists where expecting a -.5% but the number came in stronger at -.3%. This is the first negative reading for GDP since quarter 4 of 2007. We also got the release of jobless claims which came in slightly worse then expected at 479,000 and the continuing claims dropped slightly.

The selling pressure on mortgage backed securities continues and mortgage rates continue to move higher as a result. It has been a disappointing last week and a half as we have watched mortgage rates move from the middle 5% range to the middle 6% range for a 30 year fixed rate.

I am always the optimist, so to end this update on a good note the Libor rate, which is the rate of interest that lenders borrow from each other is dropping. This shows an easing on the credit markets as lenders are more willing to lend to each other. The 3 month Libor rate dropped overnight from 3.4% to 3.1%. As the credit market eases, this should attract buyers into the mbs market but it is going to take time.

Stay positive and historically speaking we still have fantastic mortgage rates.