The 'Euro Crisis' and What it Means for U.S. Mortgages

By now most American investors have tired of the market whiplash caused by the Euro crisis. One day there's a deal, the next day there's not and Great Britain wants a say even though they're not on the Euro and forever glad they didn't join. Mortgage bankers are probably looking at the mess and wondering what it all means for them. First off, until the stock market settles, wealthier Americans will not be tapping their equity holdings to buy a “jumbo house,” unless, of course, they're really wealthy and don't care. American banks are not heavily invested in Euro debt, but if American exports to Europe suffer in the year ahead, business loans tied to U.S. corporations could face some delinquencies, but it probably won't be crushing. Meanwhile, European investors bottom fishing in the housing market of (warm and) sunny Florida are probably putting that idea on hold. Future stock market swoons will cause a flight to U.S. Treasuries which means mortgage rates will stay low. In other words, over the next 12 months it looks like more of the same.