Euro-zone finance officials are voicing optimism this morning that a deal to avert a Greek debt default is imminent. The rumor mill is buzzing with chatter that an agreement between the Greek government and its private creditors will be complete within days. The “so what” factor here is pretty straightforward. Massive amounts of capital have fled the multi-year crisis in the euro-zone and have poured into safe-haven assets like U.S. dollar-denominated Treasury debt obligations and mortgage-backed securities.

The good news part of the story is all this capital has helped push mortgage interest rates here at home to historical lows. The bad news part of the story is once the financial threat begins to diminish in Europe — capital parked in safe haven investments will likely begin to look for higher yielding opportunities elsewhere. Once the process starts one of the significant supports behind the move to record low mortgage interest rates here in the U.S. will slowly begin to fade. I will continue to keep you posted on this developing story.

According to Commerce Department statisticians, the US economy grew at its fastest pace in 1 1/2 years in the fourth quarter of 2011. Fourth-quarter gross domestic product, a measure of the value of all goods and services produced within the country, grew at a 2.8% annual rate. The growth marked a sharp acceleration from the previous three months pace and it was the quickest since the second quarter of 2010. Mortgage investors largely shrugged this report off since most of the big jump in growth was due to inventory accumulation. Most economists expect companies to cut back on inventories in the first three months of 2012. If this assessment proves accurate, overall economic growth in the first three months of 2012 will likely slow noticeably and upward pressures on mortgage interest rates will remain modest.

Looking ahead to the coming week — Monday’s Personal Income and Spending Figures for December together with Wednesday’s Institute of Supply Management’s Manufacturing Index will be the warm-up act before January Nonfarm Payroll figures take center stage on Friday morning. There is a growing chance that one or any combination of these reports may prove stronger than the market now expects. If so, the surprise has potential to put some upside pressure on the current level of mortgage interest rates.

Mortgage Rates as of Friday January 27, 2012 ( purchase transactions )

30 day rate locks, subject to credit score and loan to value edits

FHA

30 year fixed 3.75% 0% points 0% origination fee

3.50% 1.0% origination fee

Conventional

30 year fixed rate 3.75% .625% origination fee ( Loan to value and credit score will have an impact on final quote )

3.625% 1.0% origination fee

15 year fixed rate 3.125%

5/1 ARM 2.875%

7/1 ARM 3.125%