Napa Mortgage News

Increased Optimism on Greece

For most of June, shifting sentiment about the situation in Greece has been the main driver of U.S. mortgage rates. Over the past week, mortgage rates gave back the improvement seen during the middle of the month.

Optimism grew this week that Greece and its creditors will reach some kind of a deal to avert a Greekdefaulton its debt and the economic consequences that would follow. In prior weeks, the investor response to the uncertain outcome was to invest in safer assets like U.S. mortgage-backed securities, and increased demand drove mortgage rates lower. Since sentiment has shifted, the reverse has taken place. A deal is still not certain, though. Greek officials and creditors will be meeting daily to seek a resolution to allow Greece to make a debt payment dueJune 30.

A tight supply of homes for sale prevented even better results. Recent data on housing starts and building permits suggest that builders are ramping up production.

Looking ahead, investors will remain focused on the situation in Greece. In the U.S., the important monthlyEmploymentreport will be releasedon Thursday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, Pending Home Sales will come out on Monday. ISM Manufacturing will be releasedon Wednesday. Mortgage markets will close earlyon Thursdayand will be closedon Fridayin observance of Independence Day.