Daily Commentary by Larry Baer: Consumer prices for U.S.
goods and services were flat in December. Excluding the more volatile
food and energy components the so called "core" rate of inflation
edged up a very benign 0.1%.
In a separate
report, the Federal Reserve reported industrial production increased 0.3% in
December while capacity utilization ticked up 0.1% to 78.8%.
Mortgage investors
gave both reports little more than a passing glance. Today's economic
news simply reinforced the popular view that inflation will not be a threat to
the prospects for steady to perhaps fractionally lower mortgage interest rates
for several months yet to come.
As they do every
Wednesday, the Mortgage Bankers of America released their Mortgage Application
Survey for the week ending January 11th. The MBA reported
overall demand for single-family mortgage financing rose by 15.2% on a week-over-week
basis. The purchase index grew by about 13.0% and refinance demand
expanded by 15.3%.
For the week
refinance applications accounted for 82% of all applications and 79% of the
prospective loan volume.
The contract rate
for 30-year fixed-rate conforming mortgages held steady at 3.61%. The
interest rate is 11 basis points higher from four weeks ago, but still 45 basis
points lower than year-ago levels.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
