Mortgage bonds opened up a little lower today on a better than expected Durable Goods report.  Stocks like that number and, additionally, Atlanta Fed President Lockhart spoke and mentioned that inflationary pressures should ease in the next few months.

While bonds are down a bit, this second piece of news could reverse the market and help bonds as the day develops.

FHA Risk-Based Premiums, a new change in the most recent FHA overhaul before the subsequent FHA overhaul (yes, we find it confusing too), will be gone for at least 12 months effective October 1st.  This really means that good credit borrowers may wish to close before this moratorium.

Essentially, there is a slight reward for having exceptional credit right now.  Once everyone is pooled together again, the costs for high-credit borrowers will go up as they essentially pay for the risk that these riskier borrowers will bring.

Consumer confidence for August jumped a bit.  This optimism appears to be a direct reflection of falling energy prices.

New Home Sales were at 515k versus 525k expectations.  The national average home price is down 6.3% year over year.  This is actually pretty good news for most Chicago homeowners.  That national figure doesn't reflect your individual home's price very much, but it definitely does mean that with all the awful markets (Florida, Arizona, Nevada, etc.) the median price is only down 6.3%.  If you think about the number of $275,000 homes in Florida that are now worth $225,000 or less, you can see why the median number would move.

The US Dollar, beaten and battered, staged a nice rally as German business and consumer confidence slips.  A strengthening dollar, which would happen if the European Union's largest economy slipped, would slow any oil prices and chop the legs out from energy-driven inflation.

Rates are recovering.  For existing homeowners, the Fannie Mae fees for slight credit blemishes mean that this is an important time to work on credit scores.  Whether it is disputes or optimization, a 'good' not great credit score will now cost you more than before.

For purchase loans, it is tough to beat the City of Chicago mortgage program.  The IHDA program with the grant can also be a great option right now.  It allows for time to improve credit scores and refinance into a lower rate later.

Stay tuned.  This could be an interesting market.  Low inflation can be good for both stocks and bonds.