Before we dive into what’s happening this week, I’ve got some BIG news!
We are now doing loans in the state of Colorado! If you or someone you know is in the market, we’d love to help you out.
And now back to your weekly update…
Last week was a wild week once again as mortgage rates rose to the highest level we’ve seen since the beginning of the pandemic…
Last week was a wild week once again as mortgage rates rose to the highest level we’ve seen since the beginning of the pandemic, signaling further normalization and recovery of the economy. According to the weekly survey of mortgage rates published by Freddie Mac, the average rate for a 30-year mortgage rose by 0.8 percent, which is an unusually big jump up.
Further evidence of rising inflation is likely the primary driver of rising rates at this time. However, concerns over geopolitical uncertainty with Russia threatening to invade Ukraine have sparked a “flight to safety” by investors moving investments into the bond market – considered a safe haven when there’s uncertainty. When more money comes into the bond market, it can cause rates to recover slightly, so we’ll be keeping an eye on that this week.
Also this week, we’ve got a slew of housing data coming out, beginning with the Housing Market Index. This index measures the sentiment of the nation’s homebuilders and their confidence in the housing market. The index is expected to remain steady.
Next, on Thursday we get a look at the leading indicator report on Housing Starts and New Building Permits. A 1.71 million annual rate is expected for January starts versus 1.70 million in December which was higher than expected. Permits especially beat expectations in December, and 1.76 million is the consensus for January.
After climbing in the prior three reports, Existing Home Sales fell sharply to a much lower-than-expected annual rate of 6.1 million in December. Little change is January’s call.
I’ll also be keeping an eye on the release of the Fed Minutes. Comments by Fed members in the media have sparked worries in the markets that the Fed may be considering some heavy-handed measures to curb inflation. Expectations are that inflation will peak next month so hopefully, the Fed’s measures will not over-correct. We’ll just have to wait and see what they decide to do.
Retail sales numbers come out on Wednesday. December retail sales proved far weaker than expected, contracting 1.9 percent overall to suggest that US consumers shopped early during the holidays. Given the easy comparisons against December’s weakness, January’s sales are expected to rise 2.0 percent overall and 1.0 percent excluding vehicles.
Have a great week! And please reach out to me if you would like to access the equity in your home. Rates are likely to continue to rise for consumer products like cars and credit cards, so now is a great time to improve your financial picture, pay off higher-interest debt, and plan for what I believe to be rising rates ahead.
