Mortgage Rate Update May 10, 2012
Mortgage note rates are still at all-time low levels but the accompany closing costs are slightly higher this morning.
Can Greece be saved? For the past couple weeks US interest rates have been driven to all-time low levels as political turmoil has engulfed the ailing country. The uncertainty surrounding the impact of a Greek disorderly default on the European financial system has encouraged investors to seek “safety” in the form of US-denominated debt securities, including mortgage-backed bonds.
Today though there may be a glimmer of hope. A small leftist political party has reportedly broke ranks with the Syriza party which has been the main voice of dissension from the European Union. Should Greece’s political coalition steer back to the austerity measures laid out in previous bailout plans it would likely pressure mortgage rates higher.
Here in the US, weekly jobless claims were reported in line with expectations but the Labor Department reduced the number of claimants previously reported for earlier weeks. Jobless claims had been increasing over time raising worries about the health of the economic recovery.
The US Treasury is set to auction $16 billion in 30-year bonds later today. Given that interest rates are at all-time low levels it will be interesting to see how much demand there is for these long-dated securities. The 10-year Treasury yield is back to 1.90%. I will switch to a locking bias if the 10yr breaks through this important technical level.
Current Outlook: floating