Mortgage Rate Update May 29, 2012

One quick housekeeping note: Beginning today ‘rate update’ will only be sent twice per week (Monday’s + Thursdays).  Even with the reduced number of communications I will still be able to provide adequate education on what is taking place in the financial markets & mortgage rates.  Thanks!

Mortgage rates are unchanged after the lengthy holiday weekend.

Europe remains the primary focus for investors.  The Greek elections, which are being viewed as a referendum on whether or not Greece remains in the Euro-zone, are only a couple weeks away.  Opinion polls over the weekend place the conservative party (pro-EU) ahead of the leftist-party (anti-EU) by a small margin.  As results of the election become more clear the lack of uncertainty could  pressure US interest rates higher.

Meanwhile, the Spanish Government nationalized the nation’s largest lender last week which has sparked additional fears of financial contagion.  As long as concerns exist regarding the health of the financial system rates in the US should remain relatively low.

In US housing news the Standard & Poor’s Case-Shiller Home Price Index report showed that home prices in the nation’s 20 largest housing markets declined on a year-over-year basis in March.  Here in Portland home prices declined by 2.9%.

The economic calendar is heavy in this condensed week.  The highlights include employment data which will be released on Thursday & Friday.

Current Outlook: neutral