Mortgage Rate Update August 11, 2011

Mortgage rates created new all-time lows yesterday afternoon but pricing has worsened slightly this morning.

The French financial sector has been the latest cause for concern for investors.  Speculators are figuring that France will be the next developed country to face a credit downgrade from the ratings agencies.  If this takes place investors are concerned that French banks will not have enough capital to sustain losses stemming from Greek debt holdings.

Back here in the US the Labor Department reported that new jobless claims were lower than analysts had expected last week.  For now, the markets are interpreting this as good news for the economy which is why stocks are bouncing back today and interest rates have reversed the downward trend.

From a technical perspective mortgage rates appear poised to move higher.  However, there is a lot of emotion and fear in the financial markets these days so it’s difficult to predict what will move the markets day-to-day.

Current Outlook:  locking bias