Update #3/ Week of September 7, 2009

Good Morning Everyone and Happy Wednesday! European stock markets reversed the downward trend of the Asian markets early this morning and set the stage for a positive opening for US equities. There are only a couple potential catalysts for the market to digest later this morning. One of these events is the results from the $20 billion auction of 10 year Treasury notes that is expected in about 20 mins. Demand has been strong for short term investment vehicles of late helping our rates on the mortgage ARM’s to remain very low. Our fixed rates this morning are actually slightly better than this time yesterday.

The other catalyst that might have an impact on equity markets is the release of the Fed’s Beige Book due at about 11:00 AM. This report has a big impact on what the Fed’s do when it comes time to raise or lower rates. Nobody expects any change in the near future, but the head of the Chicago Fed said that when they do raise rates, it will be substantial and quick in an attempt to keep a “hawkish eye” on inflation. That will be potentially devastation for the housing recovery, but keeping inflation in check is the Fed’s number one job, even to the detriment of the housing market.

FYI, the 5/1 ARM product is now strictly below 4% and looking like it will hover below 4% for a while….

I will be in the office all day today, although I will be in our monthly mortgage meeting for an hour starting at 1PM. Otherwise, I will be available by phone or email. Call me and let’s get some business going! And . . . have a terrific Humpday!