Mortgage Rate Update May 15, 2012
Mortgage note rates remain at all-time low levels.
Encouraging economic data is being overlooked this morning in favor of the political impasse in Greece. Leaders from the various political factions there have failed to build a coalition government which means they face a run-off election in June. For US mortgage rates this means we should remain near all-time low levels because of continued uncertainty and speculation regrading the fate of Greece and the surrounding European Union countries.
Speaking of the EU, it was reported earlier today that on the whole the EU economy was unchanged in the 4th quarter of 2011 from the 3rd quarter. Many analysts had been expecting a contraction so the results were better than expected. However, if you digs deeper into the results you’ll find that Germany grew by .5% while Italy, Spain, and Portugal contracted.
Despite speculation that the US economy has been driven back into recession this morning’s monthly retail sales report for April showed modest growth in consumer spending in the retail sector. A separate report from the Labor Department showed that prices paid by consumers rose by 2.3% on a year-over-year basis.
All in all the economic data out today was better than many had expected. However, investors remain primarily focused on Europe which isn’t getting any better any time soon. I will remain in a neutral position.
Current Outlook: neutral