Wednesday, April 15, 2009

Tax day!!

Overall consumer prices fell by 0.1% in March and recorded their first 12-month drop since 1955 as slumping demand amid a severe recession pushed down energy and food costs. Core consumer prices, a value that excludes the more volatile food and energy components, rose 0.2%. The upward pressure on core consumer prices is a little stronger than some analysts would like to see -- but not strong enough at this juncture to support any major fears of inflation threats.

In a separate report Federal Reserve data showed industrial production fell an unexpectedly sharp 1.5% in March - capping a brutal quarter in the manufacturing sector as businesses pared orders and slashed inventories in the face of plunging demand as the recession deepened. The March decline was the sixth consecutive month of puny numbers from the nation's factories. The capacity utilization rate dropped to 69.3%, the lowest levels since the government began gathering this data in 1967.

Mortgage applications for both purchase and refinance fell last week even as mortgage interest rates treaded water just above record lows set two-weeks ago according to data released today by the Mortgage Bankers of America. Total mortgage applications fell by 11% during the week ended April 10th. Purchase applications slumped 11.3% while refinance loan requests dropped by 10.9%. During the week ended April 10th the average rate for fixed-rate 30-year mortgages dipped to 4.70% from 4.73% the prior week. During the last week of March 30-year fixed-rates hit an all-time low of 4.61%.

Today's battery of economic data reports general falls into the mortgage market neutral category. For the balance of the day look for mortgage interest rates to trade their direction cues from trading action in the stock markets. Higher stock prices will tend to put some upward pressure on note rates while falling stock prices should be supportive of steady to perhaps fractionally lower mortgage rates.