Mortgage rates are priced slightly better this morning.
The markets remain focused on Greece. After a bailout package was agreed upon over the weekend, which included requirements for Greece’s government to significantly reduce expenditures, violent protests have erupted there. Some estimates are reporting that over 100,000 Greek citizens have taken to the streets. The protests call into question the long-term stability of the country which is supporting the “flight-to-quality” trade that we’ve referenced in ‘rate update’ each of the past couple days.
What’s interesting is that in the past couple days yields on mortgage rates have fallen by about .125% across the board. However, yields on 10-year treasuries have fallen by about .20%. The greater decline in the 10-year treasury shows that investors are seeking “ultra-safe” investments while the uncertainty in the EU exists.
We shifted our outlook yesterday to a “floating” stance and that appears to be the best approach so long as Greece looks unstable.
Current outlook: floating