Mortgage Rate Update February 8th, 2012

Mortgage rates are unchanged this morning.

All eyes remain on Greece as political leaders from the four major political parties meet there to discuss if they’ll agree to further austerity cuts which European & International Monetary Fund officials are demanding in exchange for concessions on existing debt holdings.

Greek politicians are in a tough spot because concessions from creditors are needed immediately to avoid a disorderly default but Greek citizens are protesting in mass over spending cuts which will further depress growth in the economy.

Mortgage rates have increased by about .125% over the past week on better than expected jobs data (last Friday) AND the expectation that Greece will avoid a disorderly default which could trigger financial contagion in Europe.  However, even if Greek officials reach an agreement in the near term it does not resolve the long-term debt problems in Europe so mortgage rates will likely remain relatively low.

Mortgage rates will have to compete with US Treasuries again today.  The US Treasury is scheduled to auction $24 billion in 10-year Treasury notes.  Strong demand will help rates remain low and vice versa.

I will keep a locking bias until this weeks debt auctions are complete.

Current Outlook: locking bias