![Econ chart](http://swansonhomeloans.com/wp-content/uploads/2011/11/Econ-chart.gif)
Mortgage rates are unchanged this morning.
Following the announcement last week that European leaders had agreed upon a “grand plan” to address a Greek default it looked almost certain that mortgage rates would move higher permanently. In a sign of the times though volatility has returned as analysts remain skeptical about the EU’s ability to prevent contagion in the financial system. This chart in this weekend’s Economist magazine sums up the renewed fear well. Basically, the “grand plan” does not have deep enough pockets to bailout Greece, European banks, as well as Italy & Spain.
Attention will be drawn away from Europe later today when the Fed wraps up its 2-day monetary policy statement and press conference. Some analysts are calling for another round of stimulus to boost the economy but its unlikely we’ll see that. Like raising a child the Fed (parent) is hesitant to train the markets (children) that they’ll react every time there is a shock to the system. In the long run it’s better for everyone if you let the child cry from time to time.
It’s employment week and today we got a look at private payroll company ADP’s version of the jobs report. It showed 110,000 new jobs were created in the private sector last month. This was slightly higher than expectations which is typically bad news for mortgage rates. However, this report rarely shows correlation with Friday’s government version which carries more weight.
Mortgage rates are very close to all-time lows and the last couple times they’ve achieved this level they’ve moved higher within 48-72 hours. Therefore, I am shifting to a near-term locking position. However, if fear over Europe’s future grows I can see a case for mortgage rates reaching new all-time lows.
Current Outlook: Locking bias in the near-term, long-term neutral