Mortgage Rate Update July 18, 2011

Mortgage rates are unchanged this morning.

On Thursday & Friday of last week attention was focused on the domestic economy and interest rates improved on overall disappointing data.  With the economic calendar fairly light today rate watchers have shifted attention back to the Euro-zone.

Analysts have begun to dig deeper into the balance sheets of European banks and realized that many banks in “safe” Euro-zone countries have significant exposure to government and private debt from many of the EU nations that are considered “risky”.  This is causing greater uncertainty and driving demand of US-denominated debt securities.

The theme for this week’s economic calendar is housing.  Earlier today the National Association of Home Builders reported builder confidence slightly higher than expected but still at depressed levels.  Later this week we’ll get a peek at housing starts, existing home sales, and the FHFA Housing Price Index.

As long as uncertainty persists in Europe and the economic recovery remains in question mortgage rates will remain low.  However, It’s difficult to imagine rates being too much lower than current levels.

Current Outlook:  neutral