Mortgage rates are worse today on better than expected economic news and optimism regarding the European debt crisis.
In economic news, the first four days of holiday retail shopping were much stronger than analysts had been expecting. According to one measure sales rose by 6.6% on black Friday compared to last year. In another measure sales for the first four days of holiday shopping were up 16.4%.
In housing news, new-home sales increased by 1.3% last month. Although the overall level of annual homes sales remains depressed this reading still beat analysts’ expectations. In addition, The Economist Magazine’s housing barometer shows that home prices in the US remain “undervalued”.
Reports out of Europe suggest that European leaders are close to reaching a new agreement that would apparently go along way in preventing contagion. The proposed plan would apparently pave the way for the EU and the IMF to guarantee a portion of ailing countries debt and impose mandatory austerity measures when a country reaches a certain level of debt.
Rates are suffering in light of an optimistic outlook for the domestic economy and the end game in Europe. I will switch to a locking bias.
Current Outlook: locking