Daily Commentary by Larry Baer: Mortgage interest rates got a nice little bump to
lower levels this morning as global investors flocked into the safe haven of
U.S. dollar denominated assets like Treasury debt obligations and agency
eligible mortgage-backed securities. Fear that bank problems in Cyprus
may prove contagious to other financially weak euro zone countries like Italy
and Spain
ignited the new round of "flight-to-quality" buying. Europe
is a lingering threat with the fragility of its banking systems and U.S. dollar
denominated debt instruments are one of the major tools available to global
investors to mitigate part of that risk.
In the face of this
morning's reaction to renewed banking woes in Europe
-- expectations are high today's Treasury Department auction of $35 billion of
5-year notes will be well bid. If so, the event will tend to support
prospects for steady to perhaps fractionally lower mortgage interest
rates. The auction will conclude at 1:00 p.m. ET and I'll post results on
my website as soon as possible thereafter.
As they do every
Wednesday, the Mortgage Bankers of America have released their Mortgage Application
Survey for the week ended March 22nd. The refinance index
gained 8.0%, while purchase activity advanced by 6.7%.
Refinance activity
has improved 2.8% over the past four weeks and is higher by 17% from year ago
levels. Purchase applications have increased by 4.4% over the past four
weeks and have advanced by 11% from a year earlier.
During the week, the
contract rate for 30-year fixed-rate conforming mortgages decreased by 3 basis
points to 3.79%. The interest rate is 2 basis-points higher from four
weeks ago but 44 basis-points lower from a year ago.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
