Rate Update May 20, 2010
Mortgage rates priced slightly better again this morning.
Mortgage rates are now at the lowest level since August of 2009 making it a great time to buy a home or lock in a rate on a refinance.
Why are rates so low?
As the WSJ reported this morning inflation is at a 4 decade low. Inflation is the primary factor that drives mortgage rates so mortgage rates are benefiting.
Furthermore, investors are growing more and more concerned about Greece and the repercussions of a Greek default. Following yesterday’s unilateral move on the part of Germany the EU looks divided. It will certainly take a coordinated effort on the part of all EU countries to fix the debt crisis. This growing fear is further sparking the flight-to-quality trade which has helped drive yields lower in the US.
Current outlook: neutral