In a recent poll, 40% of Americans think we are headed toward a recession.

 Whether we are or we aren't, the economic news today is negative.  The very important Consumer Sentiment metric fell to its lowest point in two years which is not good news for stocks especially since it coincides with the impending post-thanksgiving shopping season.  But there's more.

Oil prices continue to flirt with 100 dollars per barrel.  Average home prices continue to fall.  Hank Paulson, the OECD (Organization for Economic Co-operation and Development), and others are coming out in agreement with my previous op-ed article saying the worst is yet to come for the housing and mortgage market.  S&P Chief European economist agrees and forecasts increasing Fed rate cuts in 2008.

The Dow is currently down over 130 points, and the 10 year note yield is hovering around 4.0%.  Mortgage Backed Securities (MBS's) are improved all across the board this morning.  This is great news for mortgage rates.  Look for a rate improvement when lenders release rates this morning.

Keep in mind though, that this rate drop will be tempered by "technical factors."  Technical factors are like a rubber band that traces the moving average of mortgage rates over time.  The farther the daily rates are pulled away from that average, the more technical resistance.  Since rates are getting so low, the beneficial rate news today will not have as big of an effect as it would if the Dow were at 13,700 for instance.

Stay tuned for rates from our best lenders when they are released, but I expect an average of a .250% of an improvement to cost. Some lenders will be at .125% with others at .375%.  Also, the morning is young and things could change.  Stay tuned!