Mortgage Rates Increase as Mortgage Applications Hit Highest Level Since 2009
Mortgage rates increased slightly week over week but that didn't stop homeowners looking to refinance or potential home buyers from applying for a mortgage. Mortgage rates increased on all types of conforming loans and 30 year FHA loans. Jumbo mortgage rates bucked the trend and were lower in the Mortgage Bankers Association's Weekly Mortgage Application Survey.
Today's mortgage rates on 30 year conforming loans increased to 3.88 percent with 0.43 points for the week ending June 8, 2012, up slightly from the prior week's average 30 year mortgage rate of 3.87 percent which was a record low.
Although mortgage rates increased demand for mortgage loan application volume increased 18 percent from one week earlier to the highest level since April 2009. Refinance rates today are slightly above record lows so a 1 basis point uptick in average 30 year conforming rates didn't have a negative impact on the demand for loans.
Average Mortgage Rates
The direction mortgage rates take next week will depend on the direction of bond yields and that hangs in the balance of who Greeks choose to lead their country in Sunday's Election. Markets are seeing Sunday's Presidential election as as a vote for a bigger question, which is do the Greeks want to stay in the euro zone or exit the euro zone.
The latter would have devastating consequences across the globe. CNBC's Simon Hobbs talks about one scary scenario in this video: Danger Zone: Your Country-by-Country Preparedness Guide.
If this scenario were to come true investors will flee the Euro, buy dollars and U.S. Treasuries. This will send bond yields down to record lows and in-turn send mortgage rates to record lows in the coming weeks. 10 year bond yields might go as low as 1 percent and 30 year conforming mortgage rates as low as 3 percent.
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