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Europe’s Crises Keep Mortgage Rates at a Standstill

Mortgage rates largely stayed the same this week as trouble in the euro zone threatened to upend global financial markets, encouraging investors to stay near the safe haven of U.S. Treasury debt.

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Mortgage giant ""Freddie Mac"":http://www.freddiemac.com/ and finance Web site ""Bankrate.com"":http://www.bankrate.com/?ec_id=m1077678 released separate weekly surveys that found rates hovering at or above figures seen for several weeks in a row.

The GSE noted averages for the 30-year fixed-rate mortgage reaching 4 percent, only two percentage points above 3.98 percent seen last week ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the fifth consecutive week for lows for the benchmark loan.

Bankrate.com differed by few turns, acknowledging a two percentage-point rise for rates that led 4.23 percent for the 30-year loan to crest at 4.25 percent this week.

Both mortgage-rate watchers acknowledged a tide of good news for the U.S. economy, which saw consumer spending tilt upward on Black Friday and pending-home sales march forward by 10.4 percent month-over-month in October.

""What is keeping mortgage rates steady ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô and at near-record low levels ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô is the continually evolving European debt crisis,"" the finance Web site said in a statement. ""Developments in Europe ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô good or bad ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô are the likely

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catalyst for the next movement in mortgage rates, whenever that should come.""

The imminent threat posed by sovereign defaults continues to rile Europe, with Greece and Italy recently booting their prime ministers over the matter, leaving France and Germany to help foot a bailout package worth trillions of euros.

Investors cling to Treasury debt as a safe-haven investment, widening yields and keeping mortgage rates historically low, as it remains unclear whether debt-saddled countries will adopt belt-tightening measures.

On Wednesday the ""Federal Reserve"":http://www.federalreserve.gov/ announced an ""effort"":https://themreport.com/articles/stocks-soar-on-feds-move-to-save-global-financial-system-2011-11-30 it orchestrated with central banks from five other countries, including the European Central Bank, as a way to fix exchange swaps for the dollar ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a move that will keep the currency easy to borrow and continue to attract investors to Treasury debt.

Bankrate.com and Freddie noted few other changes in other mortgage rates. The GSE reported the 15-year fixed-rate mortgage staying the same from last week at 3.30 percent, with the finance Web site in observance of a change from 3.47 percent last week to 3.48 percent this week for the loan.

Freddie saw the 5-year adjustable-rate mortgage (ARM) falling from 2.91 percent to 2.90 percent this week, with the 1-year ARM climbing down from 2.79 percent to crest at 2.78 percent.

The finance Web site likewise saw few changes among ARMs, with rates for both the 5-year and 1-year climbing to 3.21 percent this week, up from 3.20 percent last week.

Not all was bad news.

""More optimistic consumers, lower house prices, and bargain mortgage rates may have contributed to the 10.4 percent jump in pending home sales in October to the strongest pace since November 2010 and may bode well for future home sales,"" ""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist with Freddie, said in a separate statement.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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