Mortgage Rate Update January 30, 2012

Mortgage rates are priced better morning.

Mortgage rates have dipped back down to all-time low levels following the Fed’s cautious comments last week.  Optimism had been rising regarding the strength of the US economic recovery and now analysts believe the road may turn rocky once again.

The economic calendar will either validate or refute the Fed’s outlook.  The Commerce Department reported that personal incomes grew at a slightly faster clip in December than expected.  However, spending rose by less than expected signaling that Americans are choosing to save their extra cash  instead of consuming it.  This week is employment week so beginning on Wednesday we’ll see the ADP jobs report followed by weekly jobless claims and the all-important jobs report on Thursday & Friday.

Nothing new to report in Europe.  Greece continues to negotiate with private creditors on a discount to its outstanding debt.  If they are unable to secure a deep enough cut then it would result in a disorderly default which would be bad for the EU and help US interest rates.

Current Outlook: neutral