Industry News
Mortgage Industry News
Mortgage Rates Drop on European Concerns
11/04/2011
Increased concerns about Europe caused a flight to safety this week, which helped mortgage rates improve. The Fed statement, which contained no major surprises, and the economic data released during the week had little impact on mortgage rates. As a result, mortgage rates ended the week lower.
The optimism from the European bailout plan that was announced last week faded a little this week. Tuesday, the Greek Prime Minister surprised investors by announcing that the proposed bailout package would be put to a public referendum. If Greek voters were to reject the plan, it could cause the problems to spread, particularly to Italy and Spain. Other Greek officials are opposed to holding a referendum, and it’s not certain that one will ever take place. Adding to the uncertainty, the Prime Minister faces a confidence vote to see if he will remain in power. In any case, investors are concerned whether the austerity measures required by the bailout plan will be accepted in Greece.
Not long ago, investors were concerned that the US economy was close to a "double dip" recession. Recent economic data and comments from Fed officials have eased those fears, though. Wednesday’s Fed statement expressed a little more optimism about the economy than in the last statement. Friday’s stronger than expected Employment data also suggested that the economy is gradually improving. Against a consensus forecast of 90K, the economy added 80K jobs in October, but the figures from prior months were revised higher by 102K. The Unemployment Rate unexpectedly declined to 9.0% from 9.1% in September.
Content Copyright © Ress No. 1, LTD and reproduced with permission.
