Nashville Mortgage Rates Update- 1/20/12

Nashville Mortgage Rates

More pressure on U.S. interest rates today, making it one of the worst weeks in a month.  The 10 year treasury yield at 2.02% was up 15 bps (.15%) in yield this week.  Mortgage bond prices this week fell 57 bps.   The bond and mortgage markets have been vulnerable to increases in rates; the low rates had been driven by weak economic outlook due to Europe’s potential and likely recession.  That is changing for the moment, and though still a slippery slope, the present view is the U.S. will improve even with Europe headed into another recession.  Secondly, Europe’s debt issues are presently seen as less a threat than what had been the case for the last few months.

Greece held serious meetings with its creditors, and according to reports, the meetings are seen as positive and will keep it from defaulting on its debt.  As with the U.S. economy, it is another slippery slope and can change quickly pending comments and news out of any official.

The housing sector saw sales up and for the first time in a long time, supply is coming down.  With gains sweeping all regions, sales of existing homes rose 5% to a 4.610 million unit rate in December, a 3rd straight month of improvement that has drawn supply on the market to 6.2 months.  This is the lowest reading on supply since 2006.

Next week the FOMC will meet; interest rate and equity markets likely will be flat into the meeting ending on Wednesday.  Nashville mortgage rates increased about .25% on the week and might be due for a little pullback next week.  Have a great weekend.