Now that the Greek disorderly default has been kicked down the street a little ways, current mortgage rates have risen sufficiently to move the best execution rate (the rate the received by the best qualified consumers) back to 4% after staying under that level for a full month. Where to from here for mortgage rates?
Mortgage rates for refinance and purchase transactions move higher still if US economic growth continues and the US stock market continues its upward momentum. The first factor seems probable based on recent economic reports, but the second potentially less so. The US stock market is due for a pull-back according to many analysts who suggest that the market has moved too far, too fast. The cost of gasoline, expected by some observers to move well over $4 per gallon in the next few months could have a big impact on the US economy and, therefore, on mortgage rates.
Mortgage rates will move lower once again if unrest in the Syria threatens more widespread military action or if tensions between Iran and Israel boil over into conflict. Moreover, if the Greek elections coming up in early April result in a renouncement of the bailout deal just completed, we could find ourselves right back to where we have been in the last several months.
In the US today only one economic report—existing home sales—is due for release. Forecasts are for an increase in this measure of the housing market, providing further evidence that the market bottom for housing is in the rearview mirror.
Tomorrow’s weekly jobless claims report is the most important data of the week as it will indicate whether or not the employment picture is continuing to improve at a steady pace, or if the improvement has plateaued.
Today mortgage rates will likely be flat with some marginal price improvement possible based on early action in mortgage-backed securities trading.
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