Another volatile week for Raleigh mortgage rates…Last week, Personal Income & Personal Spending came in basically @ expectations. Yes, this is good news, however the report hinted that inflation is something to keep on the radar.Personal Income rose by 0.2%. But after factoring in the 0.3% rise in headline Personal Consumption Expenditures (a.k.a. PCE) (FYI: PCE includes energy and food), income actually declined by 0.1%. We have seen incomes actually decline on an inflation adjusted basis 3 of the past 4 months. It is the Kevin Martini Group opinion this is because oil & ultimately gas prices are rising.
AND THERE IS MORE…the final reading of 4th Quarter Gross Domestic Product (GDP) for 2011 remained at 3%, I think this is a decent number. However, for 2011 overall, GDP wasONLY 1.625%, well below the number needed for a normal functioning economy.
So the big question inquiring minds want to know is “Mr. Bernanke – are you going to “QE” or not to “QE” – that is the question” 
Remember: Raleigh mortgage rates are tied to Mortgage Bonds…so as Bonds improve, Raleigh mortgage rates improve…and helping the housing market by keeping Raleigh mortgage rates low would be a big reason that the Fed would do another round of QE. Another key factor to keep in mind when it comes to whether Bonds and Raleigh mortgage rates will improve is the safe haven trade. Folks, there was drama on the other side of the pond in Europe…specifically Greece…believe it or not, they may have restructure once again – YIKES!
All this to says– there are many factors at play which could impact the direction that Bonds and Raleigh mortgage rates move in the coming weeks and months. The important thing to take away is that Raleigh mortgage rates still remain near historic lows and now continues to be a great time to purchase or refinance a home.
Let me know if I can answer any questions at all for you: (Kevin@KevinMartiin.com) or 919.274.3700
BIG WEEK NEXT WEEK:
- ISM Manufacturing Index will be released on Monday and gives the investor a broad look at manufacturing around the country.
- Wednesday’s ADP Employment Change will be the precursor to the government report on Friday.
- Initial Weekly Jobless Claims will be released on Thursday. Jobless claims ticked up last week to 359,000 but the Labor Department said that the data includes the annual seasonal-adjustment revisions extending back five years, which led to the recent increases.
- The data that the entire investing community will be watching and waiting for is Friday’s Employment Report, which includes Non-farm Payrolls and theUnemployment Report. For the past three months, employers have added 244,000 new workers on average and this pace will have to continue in order to get back to a more normal functioning economy.
Always keep in mind…weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and Raleigh mortgage rates improve, while strong economic news normally has the opposite result.
About Kevin MartiniKevin Martini is a trusted Raleigh lender with the Kevin Martini Group at SunTrust Mortgage. You can email Kevin at Kevin@KevinMartini.com or call at 919.274.3700.
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