Mortgage Rate Update May 17, 2012

Quick housekeeping note: ‘Rate Update’ will be on vacation tomorrow.

Mortgage note rates remain at all-time low levels.

New day same story line.  Most analysts believe that Greece will vote in anti-austerity political parties in their June 17th runoff election and that despite rhetoric from European Union officials they will exit the EU.  What is up for debate is what will happen at that point.  How far will the political, legal, and financial impact spread?  The uncertainty around that question is why investors have been seeking “safety” in the US debt markets and why interest rates have achieved all-time low levels.

According to minutes released yesterday from the Fed’s last monetary policy meeting the committee is open to additional monetary stimulus should the US economic recovery falter.  Their comments place additional weight on forthcoming economic releases; especially next months monthly jobs report.

Rates are at all-time low levels.  Will they go lower?  They could if the market sentiment worsens over the EU debt crisis.  Regardless, 5 years from now who will be upset with a 3.75% fixed interest rate (APR: 3.88%)?

Current Outlook: neutral