Do you agree with Dan Green’s analysis?
…with the last three Aprils being unkind to Europe, investors have used that month to move back into U.S. mortgage bonds, triggering a 7-month slide through which mortgage rates plunge and refinancing soars.
Political and economic uncertainty within Europe has mortgage rates down today. But — as in 2010 and 2011! — the end of the year is a time of hope. Greece (and Spain and Italy) appear to be stepping forward and the European Stability Mechanism is preparing to make bailouts as needed.
Soon, safe haven buying will recede and mortgage rates will rise. It happens every year.
There’s no doubt that the pattern has been there; however, QE3 (or has some have taken to calling it, QE Infinity or QEternity) may be a slight game-changer. With the nature of QE3 being open-ended, the rise in rates may not be nearly as dramatic this time around. That’s assuming there’s no new and negative earth-shaking news throwing a monkey wrench in the Fed’s rather still modest efforts.
What’s your take on it?