Mortgage markets improved last week, carried by the same stories that have led markets better since April. Worries of a Eurozone sovereign debt default mounted, and the U.S. economy’s revival showed itself to be slower than originally anticipated.
In Greece, the nation readied itself for its second bailout in two years. The austerity measures of last year have not worked as planned. There are concerns that a default would lead to contagion, delivering the Euro region into an economic tailspin.
These fears spurred a flight-to-quality in bond circles to the benefit of U.S. mortgage rate shoppers.
In addition, last week’s U.S. jobs data fell short of expectations, giving another boost to mortgage markets.
There were 3 weak reports:
- ADP showed 38,000 private-sector jobs created in May. Analysts expected 170,000.
- The Department of Labor showed 422,000 Initial Jobless Claims. Analysts expected 415,000.
- The Bureau of Labor Statistics showed 54,000 jobs created in May. Analysts expected 150,000.
Each of these data points underscores the fragile nature of the U.S. recovery, and the weaker-than-expected readings helped mortgage rates improve.
It’s the sixth week of 7 that mortgage rates in Mesa have improved, setting the stage for a new wave of refinances.
This week, there is very little new data on which for mortgage bonds to trade. Therefore, expect the stories from recent weeks to continue to dominate headlines. If Greece’s austerity and/or bailout plan is met with investor optimism, mortgage rates should rise. If the plan falls flat, mortgage rates should fall.
There will also be chatter about the U.S. debt ceiling, another potentially negative force on mortgage rates.
If you’re floating a mortgage rate right now, consider locking in. There’s a lot more room for rates to rise than to fall.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
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