Mortgage rates are priced slightly better this morning. Concerns over Europe and QE3 are helping mortgage rates achieve new all-time low levels.
Europe had a bad weekend. European Union (EU) finance officials have been in negotiations to create an integrated banking system with regulatory oversight. Over the weekend France’s President and Germany’s chancellor clashed on their ideas for setting up the union. Any sign of delay helps interest rates because a unified banking system is a precursor to additional bailout funds helping countries like Italy & Spain. Adding fuel to the fire was a reading of German business confidence which came in at the lowest level in nearly 3 years. Bad news for Europe is good news for US interest rates.
Mortgage rates are at new all-time low levels. Should borrowers float in order to take advantage of lower rates in the future? From a technical standpoint I am getting cautious.
Mortgage-backed bond (MBS) prices are at all-time low levels after increasing by over 200 basis points in the last 8 trading days. Anytime we see acute movements like this it is not uncommon for the trend to reverse.
Current Outlook: cautiously floating