Mortgage rates continue to slip on Greece.
Mortgage rates fell meaningfully yesterday despite the impending end of the Federal Reserve’s US Treasuries purchase program on June 30. The debt crisis in Greece appears to be coming to a head and that situation is the strongest issue impacting the markets today. Consumers in the market for a home purchase or desiring to refinance their home mortgage should take advantage of these low rates and should not expect these low rates to last.
Influencing the markets today in addition to the situation in Greece are three economic reports. First the weekly jobless claims report indicated a drop in first-time filings for unemployment benefits, yet continued to stay above the threshold that suggests an improving job market. Even more positive this morning was the report on housing starts over the past month. Housing starts improved more than analysts’ expectations. This is good news, yet much of the gain was in the multi-family homes category which simply reflects the fact that fewer people own their own homes and need rental property.
At 10:15 AM ET this morning the Philadelphia Fed Index will be released which provides a measure of manufacturing activity in the Philly Fed region. Yesterday we saw a major drop in manufacturing in the NY Fed region. Most analysts expect similarly poor results from today’s report.
Greece is on the cusp of disaster. The political situation internally is breaking down as protests increase in intensity as citizens are clearly against further austerity measures. Yet, how can other European nations throw good money after bad if Greece is not willing to restructure its budget? The quandary is that bailout funds must be provided to Greece very soon, regardless of whether Greece agrees to the conditions or not. Otherwise a Greek default will have disastrous consequences across Europe particularly among banks holding Greek debt. The chickens of a history of massive social spending, high taxes and oppressive regulation in Greece are coming home to roost.
Once again I ask: Are you listening in Washington?
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