Mortgage rates are unchanged today.
I bet you’ve been wondering how this weekend’s presidential primary election in France will impact mortgage rates here in the US. OK, maybe not but I’m going to tell you anyways.
As we’re seeing with Spain & Italy debt problems can spread quickly as investors get nervous about austerity cuts and counter-party risk amongst the Euro-zone’s financial institutions. If things get worse in Europe then France is widely seen as the “next domino to fall”. Given that austerity cuts are a politically unpopular platform investors are growing concerned about France’s ability to reduce its debt loadand help curb the debt crisis.
If fears continue to mount it could help US mortgage rates move lower. Should the Socialist party contender show well in this weekend’s elections it would stoke further fears.
Here at home another weaker than expected jobs report out this morning is raising concerns about the strength of the economic recovery. The weekly jobless claims report showed that the number of people filing for unemployment benefits declined by less than had been expected. Furthermore, the 4-week moving average for weekly jobless claims rose to the highest level since the end of January.
Also disappointing the markets this morning was a report out from the National Association of Realtors which showed that existing homes sales declined last month by 2.6%. However, the good news is that homes sales were up 5.2% from March of 2011. I think I can safely speak for everyone in the Portland-Metro market by saying that anecdotal evidence suggests we’re out performing the rest of the country because it feels like we’re up by 10+% from last year.
Both momentum and the economic landscape suggest that rates probably will not rise in the near-term. However, as I explained yesterday technical trading patterns are preventing rates from improving so I will remain in a neutral position.
Current Outlook: neutral