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Weekly mortgage rates fell for the first time since mid-December.

The most anticipated news of last week was Friday's jobs report.  According to government's press release, the economy shed another 524,000 jobs in December, raising 2008's total job losses to 2.065 million.

This is the largest annual job loss since 1945, the press reminds us.  However, as one more reason to look beyond the headlines, today's workforce is three times as large.

Other important notes included the release of the Fed's minutes from its 2-day meeting in December.  In it, the Federal Reserve said that inflation should remain low through early-2010 -- a good development for home buyers and homeowners because inflation is linked to rising mortgage rates.

This week, the market-moving data doesn't start until Wednesday, but with a fair number of Fed members making public appearances, a case of "loose lips" can lead to mortgage rate volatility.  The most notable appearance is Fed Chairman Ben Bernanke's speech in London today.  There are 10 speeches in all.

Despite the barrage of negative economic news, however, mortgage rates remain low.  If you have yet to join the Refinance Boom, make a call to your loan officer to see if your home loan is eligible.

(Image courtesy: USA Today)

Unfortunately, no matter which path they choose, move-up homebuyers in need of a new conforming mortgage will find qualifying for a home loan to be more difficult this season than in the past. 

Mortgage guidelines are dramatically tighter for people "carrying two mortgages".

Among the changes this spring's buyers face:

Selling the primary residence
If you plan to close on your new home prior to the closing of your existing home -- even if it's only by a day -- both payments must be listed as monthly debts on your mortgage application. This will disqualify the majority of homebuyers.

Converting your residence to a second home
If your current home has less than 30 percent equity in it, your mortgage application for the new home will not be approved unless you can show 6 months worth of mortgage payments + taxes + insurance in reserves for the current home and new home combined.

Converting your residence to an investment property
If your current home has less than 30 percent equity in it, any rental income derived from a tenant is disallowed on your mortgage application for the new home.  You must still count the mortgage payment + taxes + insurance as a monthly debt.

In other words, being a move-up buyer isn't as simple as it used to be.  New lending rules make buying a new home an exercise in timing and financial planning.  And the rules are expected to get tougher, too.

Therefore, if you expect to be a move-up buyer in the next 12 months, consider moving up your timeframe or -- at least -- planning ahead for it. 

Understanding the new mortgage landscape and how they can influence your upcoming purchase may be the difference between getting approved for a home loan, and getting turned down.

After a strong start Monday and Tuesday, mortgage markets suffered alongside stock markets in the latter half of last week, leaving mortgage rates higher on the week overall.

Market losses were especially steep Friday and mortgage rates headed into the long weekend on a strong uptick.

Regardless, the reasons that mortgage rates rose last week are ancient history, in most respects. 

Today, the new presidential administration begins and economic expectations reset.  Mortgage bond traders are now looking at Capitol Hill and wondering what the pending stimulus package will look like, and how many dollars will it include.

This is an important time for home buyers and rate shoppers, too, because stimulus is generally believed to be harmful to mortgage markets.  This is for two reasons:

1. Stimulus draws money to the stock market from the bond market, pressuring bond prices down and, therefore, mortgage rates up.
2. Stimulus requires the "printing of money" which devalues the U.S. Dollar and everything denominated in it.  This includes mortgage bonds and rates respond by rising.

In other words, as the scope of the stimulus package increases, it becomes more likely that mortgage rates will rise in 2009.

Aside from Beltway Politics and commentary, there isn't much to impact mortgage markets this week.  We'll see the latest earnings from a handful of financial firms and tech bellwethers including Google, Microsoft and IBM.  And, on Thursday, we'll be treated to some housing data from December. 

But, with expectations set so terribly low for everything economic, markets will likely shrug off any data that doesn't scream that the recession is over.  Instead, be on alert to lock a rate.  In a changing political environment, mortgage rates can move quickly and it's best to be prepared.

The rate you're quoted in the morning won't likely be available by the afternoon.

The calls on housing and mortgage rates run the gamut:

• Home prices have farther to fall
• Home prices have touched bottom
• Mortgage rates will dip
• Mortgage rates will rise

Put it all together and it's clear that the experts have no better idea about the future than you or I.  Their guesses are educated ones, but they're guesses nonetheless.

A terrific example of how poorly experts can predict the future comes from a Wall Street Journal performance analysis of 1,700 mutual funds. 

In 2008, only one earned a positive return.  That one fund represents zero-point-zero-six percent of all tracked mutual funds.  Surely, the fund managers of the other 99.94% didn't expect to post negative returns on the year.

So, before you use predictions about the demise (or recovery) of the broader economy to make "personal economy" decisions, consider that the oft-quoted experts have a hugely better track record in analyzing the past than the future.

All we know for sure right now is that home prices are, in general, lower than at the time point last year, and mortgage rates are, too.  By 2010, both could be lower still.

Or they may not.

After beginning the week vastly improved, and capped by a terrible late-Friday run, mortgage rates ended the week unchanged for the second week in a row.

This week, though, it's anyone's guess.  Wall Street comes back to work in force and, in the time since they've left, there's been a lot going on:

• Holiday sales were even slower than expected
• Consumer confidence touched an all-time low
• Gas prices spiked nationally -- by as much as 40 cents in some areas

Ironically, Wall Street will likely position the bad news as good for the stock market.  This is because negative economic data pressures Congress to pass larger, more sweeping stimulus in 2009.  However, what's good for stocks is often bad for bonds and that's the market from which mortgage rates are derived.

In fact, it was an exceptionally weak data point Friday that helped start the January 2 stock market rally that, consequently, caused mortgage rates to bulge.

This week, there's only one high-profile data point to watch -- Friday's jobs report.  Economists are predicting the another 475,000 Americans lost their jobs in December and that the Unemployment Rate reached 7.0 percent. 

If the actual numbers are in-line or worse than the predictions, mortgage rates could rise on the same "More Stimulus" line of thinking. 

If the jobs data shows strength, however, don't expect that rates will fall.   For now, markets are in a defensive stance about the economy and tends to work against rate shoppers and home buyers.

(Image courtesy: The Wall Street Journal Online)

For its last move in an action-filled year, the Federal Reserve announced it will begin buying its pledged $500 billion in mortgage-backed securities next month.

For home buyers and mortgage rate shoppers, the timing couldn't be better.

Because December 31 is one of Wall Street's most thinly-traded days of the year, low volume is exaggerating the announcement's impact on mortgage markets.

Mortgage rates are lower this morning.

However, you may not have much time to act.  Few mortgage lenders permit after-hours rate locking and bond markets close at 2:00 PM ET for the holiday.  If you miss today's Fed-fueled low rates, markets re-open Friday for your second chance.