In most cases, lenders' offerings are just slightly better across the board than they were in late January, the last time the market's officially noted "new all-time lows," though some lenders are not quite back to their previous best levels.
So, what's going on? A few things...
A much weaker-than-expected reading on a widely followed report on business conditions in the mid-Atlantic region gave rates markets a bit of an early jolt lower. From there, an absence of additional data gave way to technical momentum, helping rates even lower.
Markets are facing tremendous uncertainty over the eventual outcome of Greek elections in June, as well as the fate of the Spanish banking sector. Today, Spain saw their own version of the "run on banks" that occurred in Greece yesterday, reminding traders that, even if Greece makes it out of this mess still in the Euro-zone, that there are bigger fish to fry.
All that uncertainty has investors piling into safe-haven assets. In a global economy where a currency as massive as the Euro is in serious trouble due to problems in one small Euro-zone country, investors are just looking for a safe place to park their assets. US Treasuries have been one such place and their recent rally benefits other products in that same medicine cabinet, such as MBS (the "mortgage backed securities" that most directly influence mortgage rates).
Apart from Europe, there's also the consideration of Fed policy in the US. Whether or not the Fed extends recent quantitative easing measures or embarks on new ones is a matter of great concern to bond markets. At the last policy announcement, the door was left open for additional easing as-needed, and yesterday's "minutes" from that policy meeting essentially confirmed that open door. Markets perceive that "as needed" is becoming more and more "needed" if the Fed sees signs in the domestic economy like the one seen in this morning's weak data.
When investors think the Fed is more likely to buy more fixed-income investments, rates stay low or move lower, all other things being equal.
Any way you account for the causes, the bottom line is that mortgage rates are lower. Keep in mind, of course, that while the European credit theater will likely continue to weigh on markets, keeping rates fairly contained in this new, low range, that "cement" can always be broken if sufficient force is applied.
While fond of mentioning the increasing barriers to improvement at current levels, it's not that I think rates can't improve, it just feels that it will be slow going, and with risks of periodic bounce back. The wisdom of locking or floating slightly favors locking at this point, in my opinion.
Until next time...
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