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Global
Economic News Pushes Up Mortgage Rates
Global
economic news was the primary influence on US mortgage markets this week. While
the US data released during the week was mixed, an improved economic
outlook in many other countries was unfavorable for bond markets. As a
result, mortgage rates ended the week a little higher.
In
recent weeks, mortgage rates have fallen to the lowest levels in decades.
This has occurred, in part, due to the economic troubles in Europe, which
reduced the willingness of investors to hold risky assets such as stocks.
During periods of uncertainty, it's common for investors to seek a higher
level of relatively safer assets, including US mortgage-backed securities
(MBS). On Thursday, however, a series of global headlines from Europe,
Asia, and Australia contained positive news for economic growth, which
caused investors to move back toward riskier assets and out of bonds. The
stock market rallied, and mortgage rates moved higher.
On
Thursday, lawmakers introduced a proposal which, if passed, will extend the
"close-by" deadline to receive the homebuyer tax credit from June
30 to September 30. The legislation doesn't affect who may qualify for the
tax credit. To qualify, you still must have signed a contract by April 30,
but it will relieve some of the pressure to close by June 30. Buyers who
had not expected to close by June 30 may now be able to qualify.
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