Rate Update July 26, 2010
Mortgage rates are unchanged today.
Friday’s release of the European “stress tests” on European financial institutions showed that only 7 of 91 banks need additional capital. This is much better than many people had expected which we’d think would pressure rates higher. However, analysts are viewing the test stress skeptically which is why the markets haven’t reacted to it.
The US Treasury is back on the auction block this week with $104 billion in 2, 5, and 7 year notes. Click HERE to understand how government borrowing can impact mortgage rates. I fully expect demand to remain strong which will support mortgage rates.
The headline number for new home sales was strong but also misleading. The report from the Commerce Department showed that new home sales increased by 23.6% in June but that was after they revised May’s figure down by 11%.
From a technical standpoint mortgage-backed bonds are trading up against strong support. I don’t see a need to lock.
Current outlook: floating