Commentary On Mortgage

According to the Mortgage Bankers Association, volumes of mortgage
applications rose 2.2% in the week ended Aug. 12 from the prior week.
Refinancings accounted for 42.4% of total applications last week, up from
the prior week's 40.9%.

--The yield on a 10-year Treasury note is considered to be the primary
reference for longer-term mortgage rates. It stood near 4.25% today,
down from a 4-month high of 4.4% last week. Mixed inflation gauges and
the risk seen to consumer spending from record-high oil prices are still
applying a downward pressure on this rate, even though the short-term
rates are rising.

--The average interest rate on the benchmark 30-year fixed mortgage
this week was 5.8%, down from 5.89% a week earlier and almost same as
rates seen one year ago, according to Freddie Mac. The latest dip lowers
30-year rates from the nearly 4-month highs hit last week.

--The average rate on a 15-year fixed-rate loan was 5.4% this week,
down from last week's 5.47%. The loan averaged 5.19% exactly a year ago.

--One-year Treasury-indexed ARMs (Adjustable Rate Mortgage)
averaged 4.58% this week, up slightly from last week's 4.57%. At this
time last year, the 1-year ARM averaged 4.01%. Expectations of more
rate hikes from the Federal Reserve kept upward pressure on short-term
ARMs.

--Five-year ARMs (Treasury-indexed hybrid) averaged 5.34% this week,
down from 5.4% last week.