Mortgage Rate Update April 18, 2011

Interest rates are slightly lower from Friday.

Equity markets are getting hammered this morning on news that Standard & Poors has downgraded US debt to negative.  The DJIA is currently trading lower by 210 basis points, which would usually be a good sign for mortgage rates, but thus far we haven’t seen the type of price improvements that we would expect after such a large decrease in the stock market.  Follow this link to see how the stock market impacts mortgage rates.

Politicians in Washington have announced a $38 Billion cut in spending but the actual cuts from the previous budget only amount to $318 million and most “cuts” were not funding things that had previously been approved but not yet implemented.  Some analysts believe that until serious steps are taken to cut spending and increase taxes the US Debt rating will continue to be down-graded; increasing interest rates.  Follow this link to see how Government borrowing can impact interest rates.

With no sign of any large movements in the debt market occurring from this new so far today I will maintain a floating stance on locking.

Current Outlook: floating