Mortgage Rate Update January 25, 2012

Posted on by Evan in Rate Update

Mortgage rates are unchanged this morning.

There is lots of noise scheduled for today but nothing that is expected to alter the course of mortgage rates.

Starting in Europe, Greek finance officials and private creditors are meeting in Paris to discuss next steps for the country’s debt crisis.  Greece needs private creditors to accept steeper discounts in order to remain solvent but thus far they haven’t reached a settlement.  Meanwhile, Portugal saw their bond yields rise and Germany saw theirs fall in new bond auctions.  Investors remain confident in the core European nations but nervous about the smaller ones.

In US housing news, the National Association of Realtors released its monthly pending home sales report which showed that on a year-over-year basis homes under contract rose by 5.6%.

THE NAR REPORTED PENDING HOMES SALES ROSE 5.6% YEAR-OVER-YEAR

There will be a lot of commentary today about the Fed’s monetary policy statement which will take place later today.  In their effort to improve transparency the Fed will broadcast their forecast for short-term interest rates.  Currently, the markets expect that the Fed will keep short-term rates low until the end of 2013 or mid 2014.  Unless their announcement deviates significantly I don’t believe that the announcement will impact mortgage rates.

I will remain neutral in my outlook.  There is still nothing that leads me to believe rates will move substantially higher or lower.

Current Outlook: neutral