Last week started out nasty for Bonds and home loan rates, as Traders continued to sell off Bonds on their fears of continued inflation, and reduced demand for our US Bonds and foreingn investors. But later in the week, things began to turn around - dramatically. One big reason was the very welcome news on Friday that inflation actually does appear to be backing down. The Core Consumer Price Index (CPI) measures what we pay for the goods and services that we buy on a regular basis, but pulls out the often-volatile prices of food and energy. The latest read on inflation, which arrived on Friday, indicated that the year-over-year Core CPI dropped to 2.2%....the lowest read in more than a year. This was great news for inflation-hating bonds and home loan rates, and although the mid-week action was volatile, rates finished up the week about where they have started.  Read on for this weeks preview!!

Weekly mortgage update.