WEEKLY MORTGAGE NEWSLETTER

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Monday, May 15 , 2017

 

Last Week in Review:

After two sluggish months of sales, consumers opened their pocketbooks in April.

Consumers ramped up their spending at auto dealers, hardware stores and e-commerce outlets. April Retail Sales rose 0.4 percent from the 0.1 percent in March, which was revised up from -0.3 percent. Increased consumer spending could boost economic growth in the second quarter, as it makes up two-thirds of the nation’s economic activity.

There was important news on inflation, as the Consumer Price Index (CPI) was up 0.2 percent in April, in line with estimates. The year-over-year number declined to 2.2 percent from 2.4 percent in March, which was Bond-friendly news. When stripping out volatile food and energy numbers, the Core CPI saw a 0.1 percent gain in April, just below expectations. Year-over-year Core CPI also slipped to 1.9 percent from the +2 percent that has been the norm over the past 12 months, which was more good news for Bonds.

Meanwhile, wholesale inflation, as measured by the Producer Price Index (PPI), jumped 0.5 percent in March, above the 0.2 percent expected. Year-over-year, PPI surged 2.5 percent, the largest increase since moving 2.8 percent for the 12-month period ending February 2012.

Inflation is an important measure to watch because inflationary pressures can reduce the value of fixed investments, like Mortgage Bonds, and the home loan rates tied to them.

At this time, home loan rates remain attractive and near historic lows.

 

The bottom line is that home loan rates remain low, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

 

Forecast for the Week:

Manufacturing and housing data are sprinkled throughout what may be a less volatile week in the markets.
  • Regional manufacturing data comes via the Empire State Index on Monday and the Philadelphia Fed Index on Thursday.
  • Housing Starts and Building Permits will be delivered on Tuesday.
  • As usual, weekly Initial Jobless Claims also will be reported on Thursday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

The bottom line is that home loan rates remain near some of their best levels, and now is a great time to consider a home purchase or refinance.

 

The opinions expressed above are those of Derek McClintock and not C2 Financial Corporation NMLS# 135622 | CA BRE # 01821025.  Rates change every day and sometimes many times throughout the day. For your current mortgage situation, please contact Derek directly and he will help you price out your home loan rate for that particular day at that particular time.