Mortgage Rate Update June 29, 2011

Mortgage rates are worse again this morning.

As I posted on my blog yesterday the interest rate markets got roughed up yesterday.  Mortgage-backed bonds suffered the second biggest one-day loss in over 3 months.  As a result mortgage rates are priced worse across the board this morning.

This morning, as expected, the Greek Parliament approved additional austerity measures which will give that country access to additional aid and stave off a default….for now.

As a result some investors are selling their “safe-haven” positions which is why interest rates are getting pressured higher.  However, the Greek debt saga may not go away.  Some analysts believe this move only delays the inevitable.

The US Treasury is back on the auction block today offering $29 billion in 7-year notes.  The previous 2 auctions this week have not been met with as much demand as analysts had expected.  If that pattern continues today expect rates to be pressured higher.

With the Greek debt saga put to rest in the near-term I expect mortgage rates to take direction from the fundamentals of the US economy.  Uncertainty remains about the strength of the recovery which has been a contributing factor to low rates.

Current Outlook:  locking bias