Mortgage note rates are unchanged from last week.
Are stocks running out of steam? Investors are beginning to ask that question and if the answer is “yes” mortgage rates would likely benefit. Since November of last year US stocks are up almost 15% which is partially why mortgage rates have increased by about .375% from all-time low levels.
However, from a technical standpoint stocks appear to be overbought and are ripe for reversal. Furthermore, concerns over the European debt crisis are reemerging and we all know what impact that can have on US mortgage rates.
European finance officials are meeting in Brussels today to discuss Greece’s progress in terms of improving their budget. They’ll also be crafting a bailout package for Cyprus. Should investors once again become skittish of European government bonds mortgage rates would almost surely benefit.
The US Treasury is set to auction $72 billion in new debt this week. The added supply may make it difficult for rates to improve. In the long run we still expect rates to rise in 2013 but for now I am going to shift to a floating position in the hopes that a possible stock correction will lead to better mortgage rates in the near-term.
Current Outlook: floating