At the time I am writing this mortgage interest rates are about 1/8th of 1 percent higher than they were last Friday.
This week was generally bad for mortgage rates with a slight recovery today. Between Tuesday and Wednesday we saw a big hit to the mortgage bond market. The main reason for the selloff was that we saw some positive US economic reports and some positive news out of Europe. For the moment it looks like Spain is going to ask for support from The European Central Bank with their debt problem. With Europe backing away from their debt problem investors are pulling their money out of safe US investments and returning them to other investments driving US interest rates up.
The reason we saw a slight recovery today was because at the European economic summit that was held today there was not much talk about additional help to Spain. European leaders did however agree to create a bank supervisory entity by the end of the year.
A lot of loan officers and bankers were freaking out this week thinking that the refinance boom was over and that rates were going back up to 5%. I don’t think our economy or the world economy is out of the woods yet and therefore I don’t think we will see rates go to high anytime soon. This tends to happen once a month or so, a few good US economic reports combine with some positive rumors out of Europe and rates shoot up for a few days until the sobering realty comes back that the global financial crisis is far from over.
Tags: Europe debt crisis, market preview, mortgage rates outlook, Spanish bailout