Daily Market Update 12/22/09

Mortgage rates rose again Tuesday, having now increased by about 3/8% since Friday. Following last week’s Fed meeting, investors have given up hope that the Fed will extend its mortgage-backed securities (MBS) purchase program, causing MBS yields to rise. In economic news, third quarter GDP was revised down to 2.2%, far below the consensus forecast of 2.7%. Existing Home Sales increased 7.4% in November to the highest level since February 2007 as first-time homebuyers rushed to take advantage of the $8,000 tax credit that had been due to expire November 30. It has since been extended to include homes under contract by 4/30/2010 and closed by 6/30/2010. Stocks moved higher. No other data will be released today.

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