Great news last week — what did it mean for Raleigh Mortgage Rates?

Great news last week — what did it mean for Raleigh Mortgage Rates?

There was good news last week! We had our first look at Consumer Sentiment for January…it came in at 74.0, which is the highest level since May 2011! However, there was also news last week that the holiday shopping season may not have been as robust as previously thought.

Retail Sales in December rose by a meager 0.1% from 0.4% in November, and when stripping out autos, sales actually fell 0.2%. Why did this happen? It seems that steep holiday discounting held down the value of goods sold, so sales were big, but only because of the heavy discounting – it makes sense.

The news from across the pond last week also wasn’t too happy. They are still working to restructure the Greek debt – many people are going to be taking a haircut. The issue is not ‘if’…it is ‘when’ the Greek issue gets resolved. So, the real question is will Ireland, Portugal and even Italy ask for a similar hair style that Greece is getting?

So, the good news is that these problems are finally being addressed to make things better in the future. And in the short term, the uncertainty should keep money flowing into the relative safe haven of the US Dollar and US Bonds – including Mortgage Bonds, to which Raleigh Home Loan Rates are tied. In addition, Mortgage Bonds continue to be supported by the Fed’s purchases, which are also helping to keep Raleigh Mortgage Rates at record low levels.

All of this means that NOW continues to remain a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you.

Yes, on Monday the markets will be closed in observance of Martin Luther King, Jr. Day however the rest of the week’s economic calendar is full:

• Manufacturing strong? The week’s economic data kicks off on Tuesday with a manufacturing indicator from New York’s Empire State Index for January. In addition, the Philadelphia Fed Index for January will be released on Thursday. Last month, both reports reached their highest levels in months. Remember: The Stock Market likes to see healthy economic growth because that translates to higher corporate profits. However, the Bond market prefers a moderate growth environment that won’t generate inflationary pressures.

• Speaking of inflation… We’ll see inflation reports on the wholesale level in the Producer Price Index on Wednesday, followed by the Consumer Price Index on Thursday. Inflation has remained tame…and Bondholders will be closely watching these two indicators for any signs of an uptick.

• Back on track this week? Initial Jobless Claims will be released as usual on Thursday. Last week’s number showed an uptick in claims and broke the recent trend of decreasing claims. However, the rise could have been due in part to layoffs of seasonal holiday workers. So the markets will be watching to see if this report gets back on track with the recent positive trend.

• No place like home! Housing data in the form of Housing Starts, Building Permits and Existing Home Sales will all be reported this week. Housing continues to troll around low levels despite record low Raleigh Home Loan Rates.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and Raleigh Home Loan Rates improve, while strong economic news normally has the opposite result.