Mortgage Rate Update March 27, 2012

Although mortgage note rates are unchanged this morning the accompanying closing costs are slightly lower so in fact rates are better.

Concerns are being raised once again over the stability of the European Financial system.  Speaking at a news conference the Secretary of the Organization for Economic Cooperation and Development (OECD) urged leaders of the Euro-zone to boost the size of the bailout fund and warned that if they failed to do so it could have significant consequences.  As we know, uncertainty regarding the financial health of Europe helps interest rates move lower.

Also helping interest rates are the comments made yesterday by Fed Chairman Ben Bernanke where he expressed concern over the strength of the economic recovery.  Analysts are increasing the likelihood of another round of quantitative easing following the conclusion of “Operation Twist” which is scheduled to end June 30th.

In economic news, the Conference Board released its latest survey on consumer confidence which fell in March compared to February.  In housing news, the S&P Case-Shiller Home Price Index showed that home prices fell by 3.8% on a year-over-year basis for the 20 largest real estate markets.  In Portland, home prices fell 4.3% from January 2011.  Home prices are now on par with September 2004 according to the index.

Current Outlook: locking bias