Mortgage Rates to Hold Levels, July 6, 2010
Get widgets
Print
Facebook
RSS- By:
- David Coster - MortgageLoan.com
Mortgage Rate Trend Direction: Neutral
Economic Reports/Rate Impact: ISM Services Index, 10:00 AM ET, Moderate Rate Impact
Key News: European Debt, China and US Economic Weakness
Summary
Worldwide markets have rebounded sharply thus far in trading today after major losses last week. Despite continuing concerns related to debt and bank issues in Europe, and amid signs of economic slowdowns in China and the US, stocks are rallying. As stocks rise, bonds and mortgage-backed securities (MBS) would naturally be expected to fall, however, continuing a pattern we have witnessed over the past few weeks, bonds and MBS prices are moving contrary to established patterns. While the stock market may improve substantially today, economic weakness is still the major factor for bonds and MBS. Consequently, with only one moderately influential economic report today, mortgage rates are expected, at their initial pricing this morning, to come in at or near last Friday’s closing levels.
Impact of economic data released today
The ISM Services Index measures economic activity in the services sector of the economy. The results of this report are expected to show a slowing in services activity, but only slightly. On Thursday the Weekly Jobless Claims report will be released. Consequently, with little data to guide markets this week, the direction of mortgage rates will likely be provided by news.
Impact of international or political events
Former International Monetary Fund Chief Economist and Harvard professor Kenneth Rogoff warned of an “impending collapse” in China’s real estate market and a corresponding major impact on the nation’s banks. While his view is not shared by other observers, the subject is worthy of continued monitoring over the next several months.
A report in the Economist is raising concerns about Italy’s government debt issues and potential impact on European banks. According to the report Italy’s government debt is over 100% of the nation’s Gross Domestic Product, which analysts consider to be an unsustainable level. With Italy now being added to a list which includes Greece, Spain, and Portugal, as nations considered at risk of defaulting on their debt, the potential impact on the worldwide economy grows.
Finally in the US, Dallas Federal Reserve Bank Chairman Richard Fischer was quoted as saying that he expects the US economy to slow in the second half of the year. Yet Richmond Federal Reserve Chairman Jeffrey Lacker was quoted as saying that he does not expect the US to fall back into an economic recession. Slowing economic growth will likely help to keep mortgage rates in the range of the historic lows we are now experiencing.
Call For Rates
800-419-1494
Speak to a lender now.
We will match calls to our toll free number with our network of lenders.Get Mortgage Rates
National Rates
| Loan Type | Today | +/- |
|---|---|---|
| 30 yr fixed | 3.72 |
|
| 15 yr fixed | 3.03 |
|
| 5/1 ARM | 2.75 |
|
Rates may contain points
Browse Mortgage Rates
Featured Guides
Browse our comprehensive guides to popular topics related to mortgage and personal finance.