Mortgage Rate Update August 1, 2011

Although note rates are unchanged today pricing on mortgage rates has improved since Friday morning.

As you’ve probably heard leaders in congress have agreed to a deficit reduction deal that will allow the US to raise the debt ceiling and avoid an unprecedented default.  The plan is scheduled to be voted on in the House & Senate today and is expected to pass.  Now that the political drama has passed….for now….we’ll shift our focus back on the US economy and credit problems in Europe.

Lawmakers are set to vote today on the debt plan

Bad news for the economy is often good news for mortgage rates and today stocks are trading lower along with interest rates in response to weaker than expected manufacturing data.  This follows Friday’s weaker than expected GDP report which has analysts concerned about a double dip recession.

Uncertainty remains regarding the fiscal stability of many European economies.  Late last week a German finance official warned European lawmakers that the Euro-debt crisis was not over and that further discipline would be required.

Weakness in the economic recovery and continued uncertainty regarding Europe should help rates remain low.  However, mortgage rates are at multi-month lows so it remains to be seen how much lower they can go.

Current Outlook:  floating