Rate Update May 24, 2010
Mortgage rates are mostly unchanged this morning.
European debt fears continue to take center stage for the markets. Over the weekend the Bank of Spain rescued a regional savings and loan. The emergency move has spooked investors. Both US and European stock markets are lower which should help interest rates remain low.
So far mortgage-backed bonds (MBS’s) here in the US are trading sideways. MBS’s will have to compete with $113 billion in US Treasury auctions this week. Given the circumstances we expect demand for these auctions to be strong which should help mortgage rates remain low.
Mortgage rates remain at 10-month lows. Should you lock? Should you hold out and see if they go lower? It’s a tough call because of renewed volatility in the marketplace but I’m pretty sure a borrower won’t be disappointed a few years from now with a fixed rate below 5%.
Current outlook: neutral