Industry News
Mortgage Industry News
Mortgage Rates Rise from Lows
09/30/2011
After dropping to fresh lows following last week’s Fed announcement, mortgage rates gave back some of their gains this week and ended a little higher. Reduced investor concerns about Europe added to the upward pressure on mortgage rates as well.
When financial markets experience large price changes in a short period of time, it’s common for a correction to take place. Last week’s Fed announcement produced a strong rally in mortgage rates and a large decline in the stock market. With little fresh news from the Fed this week, these markets reversed a portion of last week’s movement.
The news from Europe was mostly positive this week. European officials agreed to expand the bailout fund which is being set up to provide additional liquidity for debt issued by struggling nations. In addition, Germany passed an important vote showing support for the aid programs. At times, the healthier European nations have expressed reluctance to pay for the aid to weaker nations. Since Germany is the largest Eurozone member, its support is critical. As a result, investors perceived a lower risk of default, and they became more willing to invest in riskier assets. This helped the stock market and hurt mortgage rates.
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