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The Week Ahead for Mortgage Rates: October 10, 2011

October 10, 2011 by · 1 Comment 

debt EU by pagadesign | iStockphoto.comOn the heals of better than expected employment report this past Friday, it appears that  France and Germany will step up to re-capitalize Europe’s bank to hold off a Greece default. This is good news for equities but will result in higher interest rates when the US markets return to action on Tuesday.

Another round of Treasury auctions will occur this week. $32 Billion of 3 year notes on Tuesday, $21 Billion on 10 year notes on Wednesday and $13 Billion of 30 year bonds on Thursday. If Europe continues to show signs of stabilization on their debt issues, demand for US Treasuries will diminish which would increase interest rates for not only home buyers but also anyone who holds a credit card.

On a technical note, the bond market has broken several critical support levels this past week. Our neutral position on mortgage rates has now shifted to a negative stance as improvement in Europe will only add fuel to the rising rates chatter.

It should be mentioned that the US markets are still highly volatile and the direction of Europe is the biggest factor right now. Stay tuned as the direction of the mortgage bond market and US equities could change in a heart beat.

The economic calendar this week has the following key economic and financial reports:

Key Economic Reports for Week of October 10th by James Barath

This is The Week Ahead for Mortgage Rates: October 10, 2011.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Worsen

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Improve

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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