Mortgage Rate Update July 21, 2011

Although note rates are unchanged this morning the associated closing costs are higher so overall mortgage rates are slightly worse this morning.

European leaders have announced progress on a package that would provide further assistance to Greece in the hopes of preventing the debt crisis from spreading into other European nations such as Spain & Italy.  As I mentioned in yesterday’s ‘rate update’, a credible plan would likely cause investors to unwind their “safe” positions in favor of riskier assets which would pressure rates higher.

The news out of Europe has pushed the benchmark 10-year Treasury note back above the important psychological level of 3.00%.

Weekly jobless claims unexpectedly rose for the first time in 3 weeks according data released this morning.  Despite yesterday’s disappointing existing homes sales report from the National Association of Realtors the Federal Housing Finance Agency reported that home prices climbed by more than expected (.4%) from May.  According to the report home prices declined on a year-over-year basis by 6.3%.

There is no economic data scheduled for tomorrow so interest rates are likely to take direction from stocks (currently trading higher which is bad for rates) & news out of Europe.  At least in the immediate term it looks lie rates will be shifting higher.

Current Outlook:  locking