Mortgage Rate Update July 6, 2011

...this time its Portugal

Mortgage rates are priced slightly better this morning.

It didn’t take long for European debt fears to reenter the picture.  Less than one week after Greece’s Parliament passed austerity measures Moody’s downgraded Portugal’s credit rating to “junk status”.  The move has reignited uncertainty regarding the solvency of Portugal, Ireland, and Spain.  As we learned from the long-drawn out Greek debt saga uncertainty creates a “flight-to-safety” which is good news for mortgage rates.

US Stocks are following European markets lower which is also helping interest rates.

The bulk of this week’s significant jobs data kicks off tomorrow with the ADP jobs report and initial jobless claims.  Friday brings the all-important jobs report.  I expect rates to remain fairly steady until then.

Current Outlook:  neutral