Mortgage rates are unchanged today.
Uncertainty persists in Europe which is why mortgage rates have retreated back near all-time lows over the past 10 days.
Earlier today the Italian Government announced that it was cutting its economic growth & fiscal forecasts and warned that they would not be able to balance their budget in 2013 as previously pledged. Furthermore, Spain’s Central Bank announced that the country’s commercial banks’ ratio of bad loans rose to the highest level in 17 years and added that they’d need over €45 billion to stay afloat. Bad news for Europe typically helps interest rates in the US move lower via the “flight-to-quality” trade.
Despite the reemergence of bad news in Europe mortgage rates here in the US cannot manage to penetrate below current levels. If you look at the chart for the US 10-year Treasury yield, which mortgage rates closely follow, you’ll see that there is a technical level of resistance at 1.90%. Unless the 10yr can break below that level I don;t see mortgage rates getting significantly better.
Current Outlook: neutral