Weekly Mortgage Newsletter

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Unrest in the Middle East pushed mortgage rates slightly downward last week, even as economic
Week of news continued on a positive trend. U.S. Treasuries continue to be one of the safest places to put
Feb. 27, money, and when geopolitical uncertainty increases, like it did last week, we see money flowing into
2011 Treasuries in what is known as a “Flight To Quality.” While this has pulled mortgage rates down
slightly, there is plenty of upward pressure beginning to mount. Measures of consumer attitudes all
improved last month, and weekly jobless claims dropped below the 400K mark.
Mortgage This week could be an interesting week for the mortgage industry. If we continue to see protests and
Market uprisings across northern Africa, we’ll likely have money flowing into the US, and this may create
Commentary some downward pressure on rates. However, we have some big economic reports due this week,
including both ISM Indices and the Employment Report. If economic news points toward a stronger
growth pattern, then mortgage rates very well may begin moving back upward.
This Week’s Top Economic Reports and Events 30Yr 15Yr 1Yr ARM

Mortgage Rates
Report/Event Date Prior Est. Impact
ISM Manufacturing Index 3/1 60.8 60.5 Significant 5.00%

Manufacturing is continuing to show unexpected strength. If this index 4.50%

rises again, we will see significant upward pressure on interest rates. 4.00%
Federal Reserve Beige Book 3/2 Moderate 3.50%
Painting a picture of the economy for the Fed, this book’s data may point 3.00%
to improved economic conditions, and rates will be pressured upward. 12/9 12/23 1/6 1/20 2/3 2/17
12,500.00
ISM Services Index 3/3 59.4 59.0 Moderate
12,250.00
Dow Jones

If both ISM Indices come in lower than expected, and the Flight To
Quality continues, mortgage rates may experience downward pressure. 12,000.00

Unemployment Rate 3/4 9.0% 9.1% Significant 11,750.00

After last month’s surprise drop, a revision back to the mid or upper 9% 11,500.00

could help generate some downward pressure on mortgage rates 11,250.00

1-Dec 15-Dec 29-Dec 12-Jan 26-Jan 9-Feb 23-Feb
Nonfarm Payrolls 3/4 36K 180K Significant
9.00
If January’s numbers are revised over 200K and February’s come in over
Historical Rates

200K, we’ll see some additional upward pressure on mortgage rates. 6.00

Mortgage Rate Interest Rates and Indexes

3.00
Trends 1 Yr T-Bill 0.290% 11th D. COFI 1.508%
Short-Term ÎÎ 10 Yr T-Note 3.600% COSI 2.220% 0.00
Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
Long-Term ÎÎ 6 Month Libor 0.464% CODI 0.319% 1 Yr CMT MTA COFI
CODI Prime
Volatility High Prime Rate 3.250% MTA 0.312%
10 Year Treasury Note Trend
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