Market Review

►A LOOK BACK – Last week was the second bad week in a row for mortgage rates. Three main factors are hurting rates – the inflationary implications of a lower dollar on international currencies, higher oil prices and the massive amount of supply of Treasury bonds and mortgage-backed securities due before Sept. 30. Last week the Labor reported fewer job cuts than analysts had expected but the jobless rate was higher than forecast. The Treasury Dept. announced a 3-part auction of 3-year notes, 10-year notes and 30-year bonds. Investors have been hesitant to put money into Treasury investments with maturities longer than 5 years and many fear that the government will have to increase the yield on the 10-year notes and 30-year bond offerings to attract the required capital. An increase in the yield will push mortgage rates higher.

►WHAT’S AHEAD – This week will be dominated by the Treasury auctions ($65 billion combined) on Tues (3-year notes), Wed (10-year notes) and Thurs (30-year bonds). On Thurs the Fed Beige Book will be released and is expected to show some moderation of the recessionary pressures. Also the May Retail Sales report is expected to show some strength which is attributed to timing issues.

Greg Burkett

Preferred Home Loan, Ltd.

281/657-0472 x 301 (Office)

713/906-2883 (Cell)

gregb@preferredhl.com

For more information about real estate issues in Katy or West Houston contact Steve Reddell. He is a licensed REMAX real estate agent in Katy, Texas you can trust. You can contact him directly at 281-994-5173 or visit him on the web at Katy Family Homes.

Filed under: Economy/Market, Katy Family Homes, Lenders