Mortgage Rate Trend for the week of 01/19/2007

Atlanta mortgage rates were up to a 9 week high for this past week. After sideways movement from September to November, consumer prices climbed 1/2% in December, affected by higher gasoline prices.  However, for 2006 on the whole, consumer prices were up only 2.5% which was the lowest rise in three years.  Wholesale prices were up just 1.1% for all of 2006, which was a vast improvement over the 5.4% rise we say in 2005.

The preliminary report on consumer sentiment showed a rise to 98.0 from 91.7 from December to January.  This is the best reading we have seen in over three years.  It was the result of falling gasoline prices and a better overall view of the economy.

Additionally, unemployment claims dropped to 290,000 last week, and this was the lowest level in nearly a year.

The result of all of this for mortgage rates was a 9 week high.  With all of this positive news, it seems unlikely that the Fed will be anxious to cut rates anytime soon.  The 30 year fixed mortgage rose 2 basis points this week to 6.26 percent.  While we have seen a 9 week rise, it has been a very slow rise from 6.08 percent, so we are up less than 1/4%.  The timing is still good for consumers with ARM which are adjusting sometime during 2007 or ARM's that have already adjusted to get into a 30 year fixed rate.

This week, look for updated data on new home and existing home sales to impact rates.