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Home loan rates are still great but don't be one those people that kicks
themselves and says later --- I should have refinanced when the rates were in
the 4's...~~~~~!!!!!! They will not stay this low for much longer!!!
Friday's bond market has opened in positive territory after this
morning's key consumer spending report showed much weaker than expected
readings. The stock markets are mixed with the Dow down 24 points and the
Nasdaq up 7 points. The bond market is currently up 14/32, but we will
likely see an increase in this morning's mortgage pricing of approximately
.250 of a discount point due to weakness late yesterday.
The Commerce Department reported that retail-level sales fell 1.2% last
month, falling well short of forecasts of a 0.2% increase. Even with more
volatile auto sales excluded, we saw a decline in consumer purchases of 1.1%
when a small increase was expected. This means that consumers spent much
less last month than thought, raising concerns that the economic recovery
may take longer than previously estimated. Since consumer spending makes up
two-thirds of the U.S. economy, this surprise decline in sales is extremely
good news for the bond market and mortgage rates.
The University of Michigan released their Index of Consumer Sentiment
late this morning, announcing a reading of 75.5. This was a full point
higher than expectations, indicating that consumers were more optimistic
about their own financial situations this month than they were last month.
However, the Retail Sales data is much more important to the markets and has
influence this morning's trading and mortgage rates much more than this data
has.
Yesterday's 30-year Bond auction went fairly well, but the bond market
weakened late yesterday as stock prices moved higher. The Dow posted a
273-point gain yesterday, which led to bond selling and shifting of funds
into stocks. Nothing drastic happened with mortgage rates, but it does
remind us of how influential the stock markets are on bond prices and
therefore, mortgage rates.
Next week brings us the release of a handful of relevant economic
reports, but they include two key inflation readings that can heavily move
the markets. There is no relevant data scheduled for release Monday or
Tuesday, meaning the stock markets could be the biggest force behind any
noticeable changes to mortgage rates
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