Houston's Rate Sheet

GDP revision pushes rates down

The GDP revision came in higher than the initial estimate released earlier in the month, however the revision was slightly lower than the market consensus. GDP is the most broad measure of economic activity, and it takes a few revision to get it right. In response to the news, Treasury prices rose slightly which forced yields to fall slightly. That's good news for mortgage rates, and let's hope this minor slide continues to become a bigger slide.

Here's a little detail on that story for MarketWatch.com.

Treasury prices rose slightly early Thursday, putting yields under minor pressure, after first-quarter gross domestic product was revised upward, but by a less-than-expected amount. The Commerce Department reported that GDP in the first quarter rose 5.3%. The result exceeded an initial estimate of 4.8%, but fell short of 5.6%, the consensus level of economists polled by MarketWatch. Separately, initial jobless claims in the most recent week dropped by 40,000 to 329,000. The weaker-than-expected GDP reading stirred safe-haven interest in bonds and also fueled hopes that the Federal Reserve will be able to back off its rate tightening program sooner rather than later. The benchmark 10-year Treasury note last was up 2/32 at 100-22/32 with a yield.

On the week, mortgage rates have been on the decine. For the first time in 8 weeks, Bankrate.com's weekly survey of large lenders has resulted in a 6.69 percent interest rate on the 30-year fixed rate mortgage. The decline was a 6 basis point drop from the previous week. Rates have been driven down by overreaction to last week's Consumer Price index and a weak Durable Good Orders report.

posted by Vincent Biondillo @ 9:13 AM