Mortgage Rate Update May 25, 2011

Posted on by Evan in Rate Update

Mortgage rates are priced slightly better this morning compared to yesterday morning.

Will Greece continue to use the Euro?

Uncertainty in Europe and weak economic data continues to help mortgage rates remain low.  Overnight a Greek government official was quoted as saying that Greece’s membership in the EU is at-risk.  Investors dislike uncertainty which is driving demand for “safe-haven” investment such as US-denominated debt securities; including mortgage-backed bonds.

Demand for long-lasting durable goods fell by more than expected last month.  Weaker economic activity and supply-chain disruptions are being blamed for the slow down.  Weaker than expected economic news is typically good news for mortgage rates.

The US Treasury is back on the auction block with $35 billion in 5-year notes today.  Analysts are expecting strong demand so chances are this won’t have too big of an impact on mortgage rates.

Current Outlook:  neutral