Mortgage Rate Update February 22, 2011
Mortgage rates are priced better this morning.
Concern over growing political unrest in the Middle East is helping mortgage rates despite better than expected economic data.
Much of the attention on the Middle East is focused on Libya where current president Moammar Gadhafi faces stiff opposition. Analysts are predicting he could be overthrown in the coming days/ weeks. However, he has threatened violence which is causing investors to seek “safe-haven” investments such as US Treasuries & mortgage-backed bonds (MBS’s). This is helping rates move lower.
Libya produces 1.6 million barrels of oil per day so potential disruption in that economy is causing oil prices to move higher. US Stocks are not excited about the prospect of higher oil prices and are trading lower which is also helping mortgage rates.
The markets attention is focused on the aforementioned storyline but we did get better than expected consumer confidence figures today from the Conference Board. Also of importance is the US Treasury’s $35 billion auction of 2-year notes later today.
For now we will float and hope we can continue to benefit from the flight-to-safety trade.
Current outlook: floating