Mortgage Rate Update April 13, 2012
Although mortgage note rates are unchanged this morning the accompanying closing costs are slightly less so in fact the rate environment has improved from yesterday.
Following the Fed’s monetary policy statement about a month ago where they left out any mention of further monetary stimulus mortgage rates rose by about .25%. At that time I felt that we may have seen the end of all-time low rates. However, they have returned.
The catalyst for low rates have not changed, disappointing domestic economic data & concern over Europe.
The results from a survey of US consumer sentiment was released earlier today and showed that people are less optimistic in April than they were last month. Taken with the disappointing jobs report from last week investors are concerned the economy may be slowing. Furthermore, a report out of China earlier today showed that the world’s second largest economy grew by the slowest pace in the first quarter since 2009.
The European Central Bank (ECB) released figures showing that Spanish banks sharply increased their reliance on ECB funding in March which is a signal that their financial condition may not be strong enough to draw private investment.
All in all the headlines are not very pretty today. Bad news for the economy is good news for mortgage rates. I will shift back to a floating position.
Current Outlook: floating