Nashville Mortgage Rates Update- 11/1/11

Nashville Mortgage Rates

Europe and the financial crisis brewing over defaults of sovereign debt continues to drive huge volatility in U.S. markets.  Overnight, the Greek prime minister said he would now call for a referendum vote from Greeks on whether to accept the austerity conditions that are being forced on the country.  A referendum that is essentially a vote wheter to exit the EU (European Union) or increase unemployment for years to come.  If it were only Greece it would be simple, just let the country go on its way, but the dominos could fall with Italy and Spain and possibly France and the complete collapse of the European experiment.

The situation in Europe is completely unpredictable from day to day, setting markets in chaos with massive moves up and down in the equity markets and the bond and mortgage markets.  News this afternoon continued to add to uncertainty, a source from the Greek opposition party was out this afternoon saying the referendum vote was a dead issue.  The current situation in Europe is stretching nerves all across the region and is doing the same here.  No way can we have any certainty about what will happen in our markets tomorrow, the next day, or any day after that until Europe can get something done, which of course seems highly unlikely, based on the path it’s going.

It may be never, but I cannot recall any time when markets have been dealing with a problem for as long as Europe has.  Unless one has to be in the markets, the only rational thing is to be out and stay out.  Markets function on uncertainty, that is normal; however, what Europe is doing to global markets for all this time is without precedent.

More uncertainty comes tomorrow morning and into early afternoon…the FOMC policy statement will be out at 12:30 EST, then Bernanke with his press conference after that.  Then coming up on Friday the ever volatile October employemnt report.  About the only thing we can say for sure now is that the rest of the week will be just as, if not more, volatile.

When the 10 year note falls to under 2.00% (closed at 1.99% today), it is a good time to get financing done.  Waiting for lower rates is a fool’s game; not that it may not happen, but twice the 10 year note traded below 2.00% and both times it only lasted a day or so.  Markets are treading on virgin ground, and there is no history to look back on– rates are as likely to increase as they are to fall more.

Please check back this Thursday or Friday for the next installment of Nashville Mortgage Rates Update.