Sun State Savings

Mort­gage mar­kets were mostly unchanged last week as Greece — once again — was front-of-mind for Wall Street investors. The nation-state is attempt­ing to avoid a debt default, and has been attempt­ing to avoid default since May 2010.

Early in the week, Greece reached a deal with Euro­pean Union lead­ers to secure addi­tional finan­cial aid. By Fri­day, how­ever, the deal was in doubt, as the EU lead­ers declared that the Greek Par­lia­ment would have pass new aus­ter­ity mea­sures before the aid would be released.

Aus­ter­ity mea­sures have been unpop­u­lar in Greece, giv­ing rise to riots among cit­i­zens and res­ig­na­tions among politi­cians. Mar­kets responded to the poten­tial undo­ing of the debt deal by seek­ing safety in bonds — includ­ing U.S. mortgage-backed bonds.

The Greek debt default story has helped fuel low mort­gage rates. Once a final deal is reached, mort­gage rates are likely to rise.

For now, though, mort­gage rates remain at all-time lows.

Accord­ing to Fred­die Mac’s weekly mort­gage rate sur­vey, the aver­age, con­form­ing 30-year fixed mort­gage rate held firm at 3.87% last week for mort­gage bor­row­ers will­ing to pay an accom­pa­ny­ing 0.8 dis­count points plus applic­a­ble clos­ing costs. 1 dis­count point is equal to one per­cent of your loan size.

For bor­row­ers unwill­ing to pay dis­count points and/or clos­ing costs, aver­age mort­gage rates are higher.

This week, data returns to the U.S. eco­nomic calendar.

Greece will still be in play, but the health of the U.S. econ­omy will deter­mine in which direc­tion mort­gage rates will go. There are two infla­tion reports due — the Con­sumer Price Index and the Pro­ducer Price Index.

The for­mer is a “cost of liv­ing” indi­ca­tor for U.S. house­holds; the lat­ter mea­sures the same for busi­ness. Infla­tion is bad for mort­gage rates so if either report comes in unex­pect­edly high, mort­gage rates are likely to rise.

The same is true for Tuesday’s Retail Sales report.

Retail Sales account for close to 70% of total U.S. eco­nomic activ­ity. An unex­pect­edly strong Retail Sales fig­ure will sug­gest that the domes­tic econ­omy is improv­ing and that, too, would pres­sure mort­gage rates up.

If you’re shop­ping for a mort­gage, or float­ing one with your lender, con­sider lock­ing in this week. Mort­gage rates don’t have much room to fall and there’s much room to rise.

Mort­gage mar­kets were mostly unchanged last week as Greece — once again — was front-of-mind for Wall Street investors. The nation-state is attempt­ing to avoid a debt default, and has been attempt­ing to avoid default since May 2010.

Early in the week, Greece reached a deal with Euro­pean Union lead­ers to secure addi­tional finan­cial aid. By Fri­day, how­ever, the deal was in doubt, as the EU lead­ers declared that the Greek Par­lia­ment would have pass new aus­ter­ity mea­sures before the aid would be released.

Aus­ter­ity mea­sures have been unpop­u­lar in Greece, giv­ing rise to riots among cit­i­zens and res­ig­na­tions among politi­cians. Mar­kets responded to the poten­tial undo­ing of the debt deal by seek­ing safety in bonds — includ­ing U.S. mortgage-backed bonds.

The Greek debt default story has helped fuel low mort­gage rates. Once a final deal is reached, mort­gage rates are likely to rise.

For now, though, mort­gage rates remain at all-time lows.

Accord­ing to Fred­die Mac’s weekly mort­gage rate sur­vey, the aver­age, con­form­ing 30-year fixed mort­gage rate held firm at 3.87% last week for mort­gage bor­row­ers will­ing to pay an accom­pa­ny­ing 0.8 dis­count points plus applic­a­ble clos­ing costs. 1 dis­count point is equal to one per­cent of your loan size.

For bor­row­ers unwill­ing to pay dis­count points and/or clos­ing costs, aver­age mort­gage rates are higher.

This week, data returns to the U.S. eco­nomic calendar.

Greece will still be in play, but the health of the U.S. econ­omy will deter­mine in which direc­tion mort­gage rates will go. There are two infla­tion reports due — the Con­sumer Price Index and the Pro­ducer Price Index.

The for­mer is a “cost of liv­ing” indi­ca­tor for U.S. house­holds; the lat­ter mea­sures the same for busi­ness. Infla­tion is bad for mort­gage rates so if either report comes in unex­pect­edly high, mort­gage rates are likely to rise.

The same is true for Tuesday’s Retail Sales report.

Retail Sales account for close to 70% of total U.S. eco­nomic activ­ity. An unex­pect­edly strong Retail Sales fig­ure will sug­gest that the domes­tic econ­omy is improv­ing and that, too, would pres­sure mort­gage rates up.

If you’re shop­ping for a mort­gage, or float­ing one with your lender, con­sider lock­ing in this week. Mort­gage rates don’t have much room to fall and there’s much room to rise.