Mortgage Rate Update February 6, 2012

Mortgage rates are unchanged this morning after worsening by about .125% last week following better than expected employment data.  The outlook for the European debt crisis and the pace of the US economic recovery remain primary drivers for interest rates.

Three weeks after Greek officials announced they were “close” to reaching a settlement with debt holders there is still no deal.  The markets still believe that they will manage to reach an agreement prior to a “disorderly default”, which would be disastrous for the European financial system.  Should investors grow pessimistic about the outlook it would likely trigger a “flight-to-safety”, which would help interest rates here in the US.

The economic calendar is pretty light this week.  The US Treasury is set to auction $72 billion in new debt.  The auctions kick off tomorrow with $32 billion in 3-year notes.  Click HERE to understand how government borrowing can impact mortgage rates.

Current Outlook: neutral