IL Real Estate & Mortgage Interest Rate Trends

1. (1/7/2013)
Market Update (01/07/2013)
There has been a significant sell off in treasury and mortgage markets, moving yields higher. There were several
events that led the move to higher rates. First we had the tax agreement which was meant to avert the Fiscal Cliff
come the New Year. While it did not solve all the issues and there are still possible spending cuts to be negotiated
down the road, markets were relieved to see something get done. Second were the Fed’s FOMC minutes. The
minutes showed some at the Fed felt that QE should end this year or at least be eased down. Third we had the
December Employment report. The report came in slightly higher than consensus at 155k versus expectations of
152k. There were also positive revisions to previous months. While none of these events showed any major
changing points in the economy, markets perceived them as stabilizing. This first full week back after the holidays
is lighter in terms of economic data releases and includes a round of Treasury auctions.
Economic Data/Events in the week ahead:
Monday: N/A
Tuesday: NFIB Small Business Optimism, IBD/TIPP Economic Optimism, Consumer Credit, 3yr Treasury Auction
Wednesday: MBA Mortgage Applications, 10yr Treasury Auction
Thursday: Weekly Jobless Claims, Wholesale Inventories, JOLTs Job Openings, 30yr Treasury Auction
Friday: Import Price Index, Trade Balance, Monthly Budget Statement

2. Mortgage Interest Rate Trends

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