Interest Rate update from HSH Associates

Excerpts from HSH 5/19/06 newsletter:

Fixed mortgage interest rates moved a little bit higher again this week. The more unclear the direction of growth and inflation, the more mixed signals about the direction for interest rates we see. While there are signs that growth is continuing, as well as indications that inflation continues to get a tighter grip, the increasing number of contradictory signs may indicate that we're at a turning point in the economy. Wide-ranging views amid blurry signals can create volatility in the markets, and we've certainly been seeing that in the past week as bond yields have whipsawed and stock indexes have moved down sharply from recent high-water marks. The volatility this week has left in its wake something rarely seen this year: a weekly yield for the ten-year Treasury actually lower than for the previous week. It's not even close to a trend, but perhaps it's just the barest hint of a leveling or settling for interest rates. Whatever it might be, we're temporarily encouraged, for even as the Fed ponders whether to pause or not to pause, the market itself may just find a place to hold while that that discussion occurs (but note that the Fed doesn't have to makea decision for several weeks).

	LOAN TYPE		TODAY	+/-	LAST WEEK
	30 yr fixed mtg		6.21%		6.20%
	15 yr fixed mtg		5.88%		5.86%
	5/1 ARM		5.82%		5.84%
	30 yr fixed jumbo mtg		6.42%		6.41%
	5/1 jumbo ARM		5.92%		5.95%

Source: bankrate.com  Rates include 1 point fee