Thursday, April 16, 2009

Today's macro-economic news did not offer mortgage investors much to chew on so the whole thing was shrugged-off.

The Labor Department said the number of Americans continuing to claim jobless aid hit a record 6.02 million during the week of April 4th - even though first-time claims for jobless benefits dropped unexpectedly by 53,000.
Simultaneously with the Labor Department report -- the Commerce Department said housing starts fell 10.8% on a seasonally adjusted annual basis, the second lowest pace since records were first kept in 1959. Building permits during the period dropped by 9.0%. The big drop in housing starts and building permits was largely a function of the multi-family component of the data set. Single family starts and permits were essentially flat during the reporting period.

Other than this morning's sampling of economic news, traders will likely watch dispassionately as the Fed moves into the credit market today to purchase varying maturities of Treasury Inflation Protected Securities (TIPS) as part of the central bank's $300 billion program aimed at lowering long-term borrowing costs for consumers and businesses. No one is sure what the size of the Fed's buying appetite is today - and it really doesn't matter much - the mere fact that the Fed is still an active buyer in the market place is enough to support relatively steady rates.

For the balance of the day look for mortgage interest rates to take their directional cues from trading action in the stock markets. Higher stock prices will tend to put some upward pressure rates -- while falling stock prices should be supportive of steady to perhaps fractionally lower mortgage rates.