Rate Update June 8, 2010
Mortgage rates are unchanged this morning.
Both Germany and the UK played some offense yesterday when they announced budget cuts. Growing fears over the fiscal health of Europe has created a “flight-to-safety” trade which has pushed mortgage rates back down below 5.00%. Their announcement should hurt mortgage rates so long as the markets see them as being credible.
Offsetting the aforementioned announcement was a cautious economic outlook by Fed Chairman Ben Bernanke. In an interview with Sam Donaldson last night Bernanke said that although the economic recovery remains on track he believes unemployment will remain stubbornly high for longer than analysts expect.
The US Treasury will auction $36 billion in 3-year notes today. Demand for treasury auctions has been solid over the past few weeks which is good for mortgage rates.
Mortgage rates are now back down at multi-month lows. From a technical perspective it would probably be a good idea to lock.
Current outlook: locking bias