Sun State Savings

Mort­gage mar­kets wors­ened last week as the Euro­zone moved closer to a bailout agree­ment with Greece, and the U.S. econ­omy dis­played more signs of growth.

In response, mort­gage rates climbed last week.

Rate shop­pers should not be sur­prised that rates ticked north. Since mid-2011, weak­ness in Greece has helped keep mort­gage rates low and the same is true for a weak U.S. economy. Wall Street has sought “safe assets” as pro­tec­tion from risk and that’s dri­ven mort­gage rates down.

Now, the safe haven buy­ing that served to anchor low rates appears poised to reverse.

Last month, it was shown, con­sumer spend­ing rose to record lev­els and the hous­ing mar­ket sur­passed ana­lyst expec­ta­tion again. Home­builder con­fi­dence is now at a 4-year high and Single-Family Hous­ing Starts topped one-half mil­lion units for the sec­ond straight month.

Con­form­ing mort­gage rates rose for the first time in a month last week. Unfor­tu­nately, few shop­pers knew because Fred­die Mac’s weekly mort­gage rate sur­vey failed to cap­ture the change. The sur­vey dead­line was Tues­day. Rates started ris­ing Wednes­day morning.

Fred­die Mac’s weekly mort­gage rate sur­vey put the aver­age 30-year fixed rate mort­gage unchanged at 3.87% for bor­row­ers will­ing to pay 0.8 dis­count points plus a full set of clos­ing costs.

Rates are higher today.

Beyond Greece and the U.S. econ­omy, infla­tion is another rea­son mort­gage rates are up. Infla­tion is the enemy of mort­gage rates and, an on annual basis, the core Con­sumer Price Index reg­is­tered 2.3% — it’s high­est read­ing since 2008. The Fed expects infla­tion to ease later this year but if gas prices stay high, the Fed’s fore­cast may be wrong.

This week is holiday-shortened. Look for Greece to dom­i­nate head­lines (again) and watch for hous­ing data toward the end of the week. Exist­ing Home Sales is released Wednes­day. New Home Sales is released Friday.

For now, mort­gage rates remain low. It’s a safe time to lock a long-term rate.

Mort­gage mar­kets wors­ened last week as the Euro­zone moved closer to a bailout agree­ment with Greece, and the U.S. econ­omy dis­played more signs of growth.

In response, mort­gage rates climbed last week.

Rate shop­pers should not be sur­prised that rates ticked north. Since mid-2011, weak­ness in Greece has helped keep mort­gage rates low and the same is true for a weak U.S. economy. Wall Street has sought “safe assets” as pro­tec­tion from risk and that’s dri­ven mort­gage rates down.

Now, the safe haven buy­ing that served to anchor low rates appears poised to reverse.

Last month, it was shown, con­sumer spend­ing rose to record lev­els and the hous­ing mar­ket sur­passed ana­lyst expec­ta­tion again. Home­builder con­fi­dence is now at a 4-year high and Single-Family Hous­ing Starts topped one-half mil­lion units for the sec­ond straight month.

Con­form­ing mort­gage rates rose for the first time in a month last week. Unfor­tu­nately, few shop­pers knew because Fred­die Mac’s weekly mort­gage rate sur­vey failed to cap­ture the change. The sur­vey dead­line was Tues­day. Rates started ris­ing Wednes­day morning.

Fred­die Mac’s weekly mort­gage rate sur­vey put the aver­age 30-year fixed rate mort­gage unchanged at 3.87% for bor­row­ers will­ing to pay 0.8 dis­count points plus a full set of clos­ing costs.

Rates are higher today.

Beyond Greece and the U.S. econ­omy, infla­tion is another rea­son mort­gage rates are up. Infla­tion is the enemy of mort­gage rates and, an on annual basis, the core Con­sumer Price Index reg­is­tered 2.3% — it’s high­est read­ing since 2008. The Fed expects infla­tion to ease later this year but if gas prices stay high, the Fed’s fore­cast may be wrong.

This week is holiday-shortened. Look for Greece to dom­i­nate head­lines (again) and watch for hous­ing data toward the end of the week. Exist­ing Home Sales is released Wednes­day. New Home Sales is released Friday.

For now, mort­gage rates remain low. It’s a safe time to lock a long-term rate.