It could very well be an interesting week. Financing costs for real estate investors seemed to have settled comfortably around the 4.25% range for a 30 year fixed and Freddie Mac’s weekly mortgage rate survey shows rates have been near this mark for several weeks now. Gone are the sub-4.00% days.Uncertainty breeds a stable bond market. Greece is helping Investors have already priced in at least one Fed bump and the Dow is still struggling to get past 18000 with any significant stand.

 

Greece is on stage front and center and it appears things are getting a bit out of control. Banks are closed there until at least this Thursday and over the weekend, ATM withdrawals were limited to $67. Can you imagine? That’s not even enough for dinner and a movie. Yet as small as the Greek economy is compared to other European countries in the area, the political and social impact might be more of a concern. Citizens are asked to vote on a referendum this next weekend about a new set of financial reforms. At this point, it looks like they’re not very happy with the current political regime.

Something’s going to have to give as Greece is simply borrowing more money to pay down the debt it already owns. There’s really no production in Greece to bring in tax revenues and with the situation deteriorating, what tourist is going to want to visit? Tourism is a major contributor to Greece’s economy and if that gets damaged there doesn’t appear to be much of an exit strategy.

That sort of uncertainty and the potential impact on other economies in the region could keep the Dow where it is for some time, as well as mortgage rates. Uncertainty means investors will either keep money on the sidelines or back into bonds. We’ll see.