Market Analysis

The bond market deteriorated yesterday and is flat this morning.  On the positive side for bonds, the 1st Quarter Productivity Report released by the Labor Department showed nonfarm labor productivity (defined as hourly output per worker) increased.  This increase was due to employers cutting employee hours (not a surge in production). Labor costs grew at 2.2% which was less than the 2.5% expected increase.  This friendly inflation data was offset by a speech late yesterday by Kansas City Federal Reserve Bank President Thomas Hoenig in which he expressed serious concern about the level of inflation and discussed the need for the Fed to move quickly to increase rates once the economy recovers to try to stem inflation.  Given that the stock market held its ground yesterday even with very negative news from Fannie Mae, we believe it is safer to lock than float right now.   If the market does improve dramatically, we are able to renegotiate once and get within .375 points in closing costs of current market.  For example, if the market improves to 5.625% with 0 points, we can renegotiate once to 5.625% with .375 points.  If you would like to lock with us, the first step is to be pre-approved.  You can access a short application form at http://www.ironharbor.com/xSites/Mortgage/IronHarbor/Content/UploadedFiles/Iron%20Harbor%20Short%20Application.pdf
Posted by Matthew Breston on May 7th, 2008 10:01 AMPost a Comment (0)
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