posted Feb 13, 2012, 12:04 PM by Massey Kouhssari
[
updated Feb 13, 2012, 12:14 PM
]
Week
of February 13,2012 Mortgage bond prices
were only slightly higher last week which kept mortgage interest rates in
check. The Greek debt restructuring talks dominated trading.
Greece was pushed to enact austerity measures in an effort to restructure
their current debt and avoid default but those talks stalled without any
action and default fears continued as of late Friday. Lower than
expected weekly jobless claims resulted in a spike in rates Thursday
morning. Weaker than expected consumer sentiment data, considerably
weaker stocks, and news that the S&P downgraded several Italian banks
Friday helped bond prices recover. Mortgage bonds ended the week unchanged to
better by 1/8 of a discount point. 
Fundamental
Week
The abundance of
fundamental data this week provides a good opportunity for mortgages to
improve. If the data shows weakness in the economy with little or no
inflationary pressures then it is possible for mortgage bonds to rally
resulting in mortgage interest rate decreases. However, if the data shows
that the economy continues to rebound or any significant signs of inflation,
mortgage bonds may fall pushing mortgage interest rates higher. Mortgage
interest rates remain historically favorable despite some recent
increases. Now is a great time to avoid the uncertainty surrounding
continued market volatility. Remember, the future is uncertain with so
much global economic instability. Euro troubles have helped rates here at
home. Any signs of stability in that region could reverse the flight to
quality buying of US debt that has helped rates stay low. Caution is
key.
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