It’s a blood bath in the interest rate markets today. Currently (noon PST on June 28th, 2011) mortgage-backed bonds are down big so it looks like mortgage rates will shift higher by .125%-.25% over the next 24 -48 hours. We shifted our outlook to locking this morning so hopefully you locked in ahead of this shift!
Mortgage rates are worse this morning.
The financial markets are in the process of pricing in an orderly resolution to the Greek Debt Crisis. If you’ll recall, uncertainty about the Greek government’s ability to remain solvent helped push mortgage rates to all-time lows last fall and have helped mortgage rates reach 7-month lows in the recent weeks. Greece’s Parliament is set to vote on another round of austerity spending cuts tomorrow and despite intense protests by its citizens the vote is expected to pass.
On this expectation stocks here in the US are trading higher and bonds are trading lower. Yesterday’s 2-year Treasury Note auction was not as well bid as analysts had expected. Today’s $35 billion auction of 5-year notes may also fail to meet strong demand which would put further pressure on rates to move higher.
The S&P Case-Shiller Home Price Index for April was released this morning. The monthly report showed that home prices in some of the major housing markets grew modestly which may be an indication that the market is finally turning. Here in Portland home prices fell again. According to the index home prices are now on par with November of 2004.
Current Outlook: locking bias