Mortgage rates are improving to the best levels we have seen in a month, and in light of strong economic data (consumer confidence up sharply), why is this happening?
The reason seems to be the downgrade of Greek debt to junk status by the S&P as well as a downgrade of Portugal's debt.
This frightful action has caused traders to flock to the safe haven of bonds, and as money pours into bonds, prices rise, and mortgage rates fall. Below is the bond chart for today showing bonds trading at the highest level in a month. The green bar shows an increase in bond prices (red bars are drops in price).
The trend has been up for bonds over the past week, but take a look at the chart below. This is the 3 month chart, and you will see that we are approaching a level last seen over a month ago which can serve as a tough overhead ceiling of resistance. This means that bond prices could be turned back lower and result in only a temporary improvement in rates.
With the positive economic news that is being released, it appears an opportune time to lock in a great rate, as bond prices may be turned back and the opportunity may only be temporary.
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RJ Baxter First Mortgage Corp
Branch Manager
303-670-0137 (direct)
27902 Meadow Drive, Suite 120
Evergreen, Colorado 80439
