Like a long and winding spiral staircase, mortgage rates slowing continue to improve. Interest rates are likely to continue lower on increasing fears Europe is facing defaults from Greece and increasing likelihood Greece will depart the EU. If Greece were to exit the EU it may set up a domino effect with Ireland, Portugal and Spain; “Europe’s attempt at severe austerity in efforts to bring countries’’ fiscal spending under control has failed. In Germany over the weekend, Angela Merkel’s party suffered another defeat in local elections; last weekend another local election went against her. Germany is the rock in Europe and voters are showing their resistance to any additional help from the country. In Greece over the weekend, the attempt to form a coalition government has failed leading now to another general election; most Greeks are rebelling against the austerity pledge Greek officials agreed on a few months ago.
This week after a week with little domestic economic data, there are a number of key data points on Tuesday, Wednesday and Thursday. April reports for the most part; retail sales, CPI, housing starts and permits, industrial production and factory use, the Philly Fed May index. The minutes from the 4/25 FOMC meeting will get a lot of focus, looking for clues about another possible Quantitative Easement; we still hope the Fed will not initiate another QE but there are many analysts and economists thinking the Fed will ease one more time. If the Fed were to ease again it would likely have to happen at the next FOMC meeting in June, after that the Fed will likely refrain with elections coming in November.
Mortgage rates have remained under 4.00% since February for the 30 year fixed with 0 points. Government loans such as FHA have been even lower since the same time.
For more information about rates, the mortgage process or getting started on a mortgage approval, call or email me anytime.