Mortgage Rate Update February 22nd, 2012

Mortgage rates are mostly unchanged today.

Both the interest rate and stock markets are near important technical layers of support/ resistance.  Therefore, the direction of each over the next few days could foreshadow a longer-term trend.  You can CLICK HERE to better understand technical layers of support/ resistance.

Yesterday the Dow Jones Industrial Average touched 13,000 for the first time in nearly 4 years.  Many analysts believe that this is a signal that stocks are in the middle of a bear market which will see further gains.  This is a good sign for the economy but bad news for mortgage rates.

Meanwhile, the 10-year treasury note came close to 2.08% which is widely seen as an important level of resistance.  Should yields close above this point technical analysis suggests that rates would continue to shift higher.

Interest rates look like they may get temporary relief as analyst reexamine the longer-term health of Greece’s finances.  Even though Greece was able to obtain a large bailout on Tuesday the reality is that they still have lofty targets to hit in order to remain solvent.  I still maintain that a Greek default is imminent.  The question is whether the EU will be able to put in place firewalls that will prevent contagion.

Current Outlook: floating so long as the 10-year treasury yield remains below 2.08%