Mortgage rates have fallen amidst all the turmoil emanating from Europe as investment in bonds (mortgage-backed securities-MBS) made up of loans on good, old, American houses seems like a smart thing to do. For all our economic troubles over the past four years, the reality that the US is the world’s biggest and most resilient economy has attracted investors from around the world. Today caution about the all-important summit of European leaders coming Friday is leading to a renewed demand for US MBS which is pushing rates on the benchmark 30 year fixed-rate mortgage under 4% and close to historic lows. Today is a great day to lock in an interest rate for the purchase or refinance of a home.
The cautionary tone in Europe is a result of a statement from a high-ranking government official in Europe who spoke on the condition of anonymity. He indicated that the German government was increasingly pessimistic over the prospects for a comprehensive deal coming from the Friday Summit due to the failure of some European Union members to fully grasp the risks inherent in the crisis. He said, “We get the impression from many conversations in recent days that a lot of the protagonists still have not understood how serious the situation is.”
The problem the Eurozone has in facing this debt crisis among several of its southern members is that it will take collective political and fiscal action to create and implement the types of programs and policies that will support a resolution. Collective action among 17 members with dramatically different cultures and priorities is a tall task indeed. Some agreement among the members to implement fiscal controls on members is an absolute necessity to avoid a much more significant crisis.
In the US today no economic data is set for release. The economic reports of the past few weeks have confirmed that our economy is improving. With the chaos is Europe, global investors will continue to find opportunities here to put their money to work. That will help keep mortgage rates near historic lows for a while.
Today I will begin to provide intra-day updates on the movement of mortgage rates . To access this valuable information throughout the day follow me on Twitter at @totalrates.
Loading ...
RSS feed for comments on this post.
Leave a comment