Mortgage Rate Update March 28, 2013

Posted on by Evan in Rate Update

Mortgage rates have improved slightly this week.  In some cases note rates have improved by .125% in other cases the closing costs have simply declined at the same note rate.

CYPRUS BANKS REOPEN TODAY. THE QUESTION IS IF FEAR AND PANIC WILL SPREAD TO OTHER EU ECONOMIES.
CYPRUS BANKS REOPEN TODAY. THE QUESTION IS IF FEAR AND PANIC WILL SPREAD TO OTHER EU ECONOMIES.

What is driving the improvement in mortgage rates?  Europe.  Although Cyprus did secure a bailout earlier in the week it has not squashed fear over the debt crisis.  Banks in Cyprus are reopening today after being closed for 2 weeks.  Cyprian depositors are limited to withdrawing 300 Euros per day as regulators try and prevent a run on banks.  The fear and uncertainty that is driving mortgage rates lower is not so much regarding Cyprus but instead on the panic spreading to other larger EU economies.

Jobless claims increased by more than expected this week.  This number is often volatile so special attention will be paid next Thursday to see if this week’s report is an outlier or if the labor market is worsening.  Bad news for the economy is often good news for mortgage rates.

The bond market closes early today and is also closed tomorrow for Easter weekend.  Assuming mortgage-backed bonds can hold their ground this morning I would recommend floating into the weekend.  I believe rates are likely to be unchanged on Monday which means by floating you’ll pick up 3 additional days on your lock at no charge.

Current Outlook: floating