Daily Commentary by Larry Baer: The Greek financial drama continues.
European Union and International Monetary Fund finance officials cancelled a meeting today at which most observers believed the long awaited Greek debt bailout agreement would be signed. The finance ministers said they had yet to receive written pledges from all Greek political party leaders that the austerity conditions imposed will be implemented and maintained once actual funding occurs. The patience of those lined-up to save Greece from a messy sovereign debt default is wearing thin with consistent Greek foot-dragging. After a series of broken promises since Athens was first bailed-out in May 2010, trust is in short supply. The lingering uncertainty surrounding this issue is virtually certain to provide near-term support for the prospects of steady to perhaps fractionally lower mortgage interest rates.
Mortgage investors gave this morning's only macro-economic report nothing more than a passing glance. The Federal Reserve said industrial production stalled in January as a 0.7% rise in manufacturing output was cancelled out by steep declines in mining and utility output. Capacity utilization remained at 78.6%. The data continues to show production and capacity levels remain well below the point where inflation inducing production bottlenecks might be expected to occur.
As the do every Wednesday, the Mortgage Bankers of America have released their Mortgage Application Survey figures for the week ended February 14th. The composite index, a value which includes both refinance and purchase-money loan applications, inched down 1.0% during the survey period. The number of applications taken for a home purchase slumped 8.4% while refinance loan demand improved by a very modest 0.8% from the previous week.
Refinance applications accounted for slightly more than 80.0% of all applications taken. Refinance requests currently represent 81.1% of all loans pending in the national pipeline.
The average contract rate for 30-year fixed-rate conforming mortgages finished at 4.08%, up 3 basis-points from the prior week, up 2 basis-points from the month-ago level, but down 105 basis-points from this same time last year.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
