Mortgage Rate Update January 3, 2012

Mortgage rates are mostly unchanged today.

Happy New Year!  Although it is a new year the story-lines remain the same for mortgage rates.  Sentiment over the European Debt Crisis will continue to drive the financial markets and interest rates.  Furthermore, until the US economy shows continuous signs of recovery we expect mortgage rates to remain near all-time lows.

Will rates get even better?  It’s hard to imagine a catalyst for rates to get significantly better but I can certainly see a .125% improvement within the realm of possibility.

For the first 6 months of the year history does not favor a rate improvement.  Over the past 6 years mortgage rates were higher in June than they were in January in 4 of those years.  The only exceptions were the most recent w tears when the European debt crisis flared up.

For today, better than expected economic data in Germany & the US has stocks trading higher and rates slightly worse.

Current Outlook: neutral