Mortgage Rate Update October 12, 2011

Mortgage note rates are unchanged but the accompanying closing costs are slightly higher again making rates worse this morning.  Pricing on mortgage rates have now worsened in six straight trading sessions.

Optimism surrounding Europe continues to bolster the stock market and weigh on the bond market; pushing rates higher.  Analysts are expecting European officials to release details about a plan to re-capitalize European banks in the next 24 hours.  Interest rates have already moved higher in anticipation of the plan so it’s difficult to say whether they’ll go any higher.

Later today the Fed will release minutes from its last monetary policy meeting and the US Treasury will auction $21 billion in 10-yr notes.  The trend for interest rates has reversed and they appear to be moving higher.  I wouldn’t be surprised to see rates stabilize for a day or two before continuing higher.

Current Outlook: locking bias