Mortgage Rate Update July 12, 2011

Posted on by Evan in Rate Update

Mortgage rates are slightly better today compared to yesterday morning.   .

In the absence of significant economic data, which won’t hit until Thursday this week, interest rates will react to the ongoing European debt saga, stocks, and US Treasury auctions.

The US Treasury will auction $32 billion of 3-year notes later today.  New debt supply, which competes with mortgage-backed bonds for investment dollars, is always a concern but in light of the recent flight-to-safety I don’t expect this to be an issue.

Uncertainty continues to surround the Euro-zone.

I doubt EU officials are enjoying it.

Analysts are beginning to realize that the recent “band-aid” treatment for Greece will not be sufficient to stop the bleeding.  In addition, the fiscal solvency of Italy, Spain, Portugal, and Ireland are being called into question.  Similar concerns were responsible for mortgage rates hitting multi-year lows last Fall.  Not sure if rates will get to that level again but the pattern is similar.

Current Outlook:  neutral