Happy St. Patty's Day!!!

The Labor Department reported earlier this morning that prices at the farm and factory gate fell 0.6% last month. Excluding the volatile food and energy components, the more important "core" producer price index rose just 0.1%. Mortgage investors yawned. It is worth noting that about 90% of the decline in the overall index can be attributed to the gasoline costs which fell 7.4% during the reporting period. As any of us who have filled-up the 'ol jalopy within the last four-week can attest -- prices at the pump are rising sharply. Mortgage investors largely shrugged off the benign inflation news contained in this report because they can see the proverbial "handwriting-on-the-wall" -- the recent surge in fuel costs will undoubtedly show-up to push the coming March and April producer price index figures notably higher.



Separately, the applications for home loans fell 1.9% last week despite the lowest mortgage rates in more than three months, the Mortgage Bankers Association said. The decrease was attributable to a 2.3% decline in the component of index that measures demand for loans to purchase a home. The refinance request component of the index slipped 1.7% lower. Average 30-year fixed mortgage rates edged 10 basis-points lower to finish the week at 4.91%. Mortgage rates have not been lower since early December.