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The Week Ahead for Mortgage Rates: December 5, 2011

December 5, 2011 by · Leave a Comment 

Euro Currency Symbol by askhamdesign | iStockphoto.comYou know it must be the holiday of giving when French President Nicolas Sarkozy and German Chancellor Angela Merkel agree to work together on anything. In a surprise announcement this morning both Sarkozy and Merkel agreed on a series of reforms to address the sovereign debt crisis plaguing the Eurozone.

Although it appears that the two largest economies in the European Union have come to an agreement to stabilize the Euro, mortgage bonds and equity markets will continue to keep an eye on what happens in Europe with the debt issues.

Markets are optimistic that there will be a real plan of action that emerges to deal with the debts of Spain and Italy but after two years of trying it is a leap of faith to expect anything substantive coming from the meeting.

Not much in the way of key economic readings this week. Monday the November ISM Services Sector Index and weekly jobless claims on Friday are the only serious data points.

Technically and fundamentally the US interest rate markets remain in narrow trading ranges. The 10 year note is still unable to hold under 2.00% but has found support anytime the yield climbs to 2.12% as it did last week.

Mortgage rates and mortgage bond prices are trading an even narrower range. The price on the 3.5 FNMA coupon has held in a 50 basis point price range now for almost a month. We remain skeptical that US interest rates will decline much from their present levels. The long-term outlook is that rates will begin to slowly increase from present levels.

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

Key Economic Reports for Week of December 5th by James Barath

This is The Week Ahead for Mortgage Rates: December 5, 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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