Mortgage Rate Update February 27, 2012

Mortgage rates have improved by .125%-.25% since last Wednesday when we noted that rates had hit an important layer of technical resistance.  From a technical standpoint rates are now approaching technical support so I’ll be shifting my outlook.

International finance ministers met over the weekend in Mexico City and discussed, amongst other topics, the European debt crisis.

International Monetary Fund Director Christine Lagarde warned that the, “global economy is now out of the danger zone.”  Some analysts were optimistic that the international community would be more generous in lending support to the Euro-zone but in the end no new agreements were reached.  So long as there is uncertainty regarding the fiscal stability of Europe mortgage rates here in the US should remain relatively low.

The economic calendar is filled with significant reports this week.  Since the end of last year the domestic economy has improved.  If the trend continues then mortgage rates will almost surely edge higher.  Some economists worry that higher gas prices & uncertainty in Europe will stall the recovery so we’ll have to see if this week’s data eludes to that.

Earlier today the National Association of Realtors reported that pending homes sales were better-than-expected last month.  In addition, they revised the previously released December figure higher.

Current Outlook: neutral