So, it has been 167 days since our last post. I can’t imagine what excuse we might have. I have not come up with a good one. The only thing really worth note is that the rates have come down significantly and our Refinances and purchases have just exploded!
Obviously it is the perfect time to purchase or refinance. Most of the country still has depressed housing prices, and the rates are still unbelievably low. So it seems everybody who still has a job, or expects to continue to have a job, is applying for a loan.
Which brings us to the Good News / Bad News. According to the Associated Press and CNBC, The financial services industry is witnessing yet another bubble burst, this time it is within the industry itself. 32,000 jobs are expected to be cut, adding to 533,000 jobs cut in November. The largest unemployment numbers since 1974. Read the AP Article Here.
What does all this mean to the mortgage industry? Well, opinion is mixed. What is clear is that much of it will depend on what comes out of the regulation. In the end, I’m confident, the U.S. economy will remain vibrant, but I do hold reservation. I believe in free market, and those who know me well, have had the pleasure of listening to me on my soap box. Any new regulation will determine if the sector remains vibrant, the lawmakers have a job on their hands.
Next week brings us the release of a couple of important releases for the markets to digest. The most important data of the week comes during the latter part and can cause a great deal of movement in the markets and mortgage rates. We will get a first peek at November's holiday sales to help gauge how holiday retail spending looked and a key consumer inflation reading.
Have a Great Week!
There is no relevant data to report this week.. 30 year fixed is still around 5.75% average across the country. Rates are down and housing prices are down, so it is still an awesome time to purchase or refinance! The outlook for the future is still mixed, some saying we’ve not hit the recession yet, others saying we’ve seen the worst of it. Layoffs continue, as we move into the holidays, whichever side of the fence you are on, we should probably take a moment and pray for those whose lives have been suddenly thrown into turmoil. While we are at it, let’s take a moment and consider our troops. The Men and Women who have volunteered to protect you and me and who will be spending another holiday season away from their families.
To continue with the reports…
Several reports came out today; the first was November's Retail Sales report that showed a 1.8% decline in retail level sales last month. This was a little stronger than the 2.0% drop that was expected, but is not enough of a difference to significantly affect mortgage rates.
The second piece of data was November's Producer Price Index (PPI) that also was close to forecasts but slightly favorable to bonds. This index measures inflationary y pressures at the producer level of the economy and showed a larger than expected drop of 2.2%. However, the core data reading that excludes prices for more volatile food and energy items matched forecasts of a 0.1% increase. Therefore, the data was pretty much a non-factor in today's pricing.
The last report of the day was the preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and is considered moderately important. It showed a much higher level of sentiment than was expected with a reading of 59.1. Analysts were expecting it to come in at 55.0. But, since the stock markets are showing losses and today's key data didn't reveal any significant surprises, this index also has not heavily influenced today's trading or mortgage rates.
As we speak bonds are going up. If we stay on that trend, it should be favorable for rates next week.
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