Mortgage Rate Update September 6, 2011

Mortgage rates are unchanged this morning.

It’s a new week but the same story-lines in the financial markets.  Investors are concerned about a European debt contagion & weak economic growth here in the US following Friday’s jobs report which showed no new jobs created in August.

US stocks are trading sharply lower which should help mortgage rates remain low.  Investors are shifting their capital away from stocks and into longer-duration US Dollar-denominated fixed income assets, pushing the 10-year US Treasury yield to a 40-year low, in anticipation of the Fed unveiling a 3rd round of quantitative easing.  The Fed doesn’t meet again until September 20-21st but they have made it clear that they will spend time talking about monetary tools to help stimulate the economy.  I’m not sure what else they can do.

The economic calendar is fairly light this week.  Investors will be paying close attention to President Obama’s speech on Thursday in which he plans to unveil a jobs creation plan.

Current Outlook:  neutral