Mortgage Rate Update March 15, 2011

An Explosion @ Fukushima Power Plant

Mortgage rates are better this morning.

The flight-to-safety which began yesterday is continuing today as investors sell out of “riskier” asset classes in favor of “safe-haven” investments.  As you have probably heard from all the news outlets the focus is now on the Fukushima Daiichi nuclear power plant where radiation levels briefly spiked overnight.  The earthquake and subsequent tsunami which struck last week is like nothing we have seen in recent history.  As a result there is a lot of uncertainty about how events will unfold and how long it will take to rebuild Japan’s economy.

In response to the uncertainty the Dow Jones Industrial Average started the day down 250 points.  When stocks decline it often helps mortgage rates move lower.

The markets are essentially ignoring developments in the Middle East & newly released economic data.

For now we’ll continue to watch the news headlines for updates out of Japan.  Rates have now improved rather substantially in response to the current “flight-to-safety” trade and it may not be a bad time to lock in.  I will shift my outlook to neutral.

Current outlook: neutral