After leaving the platform on Monday, the roller coaster climbed, dropped, and corkscrewed its way through a wild week and deposited us right back where we started. The benchmark 30 year fixed rate mortgage ended the week at 5.875% with a point, 6.125% without.

Tuesday. Stating in its FOMC statement “that some inflation risks remain,” the Fed showed a wait-and-see posture and left their short-term target rate at 5.25. This number hasn’t changed for the past 6 months and could well remain unchanged through mid 2007 as they sift through clues about the economy’s direction.

Wednesday. Mortgage rates climbed abruptly on November’s retail sales figures that consumers are still happily spending. That was a surprise! With a negative savings rate and depreciation in home values, one has to wonder where the money is coming from. But the report put into question the recent rally in bonds that has pushed mortgage rates lower. Mortgage applications rose to their highest levels all year, up 22% over last at this time, split roughly 50/50 between purchases and refinances. This mirrors my on-the-ground observation that the real estate business has picked up locally in the last few weeks. More people seem to have found confluence of falling prices and lower rates irresistible.