Rate Watch
Employment Situation is bad, but so are rates
For the 3rd consecutive week, mortgage rates continue to soar like the eagle. The new heights were accomplished despite Friday's dismal Employment Report. Typically, mortgage rates fall when economic news is poor. However, high oil prices and inflation fears continue to drive rates up. Last week, the price per barrel of Oil rose to a record $138. On Friday alone, the price jumped $10.
According to Bankrate.com's overnight average, the 30-year fixed rate mortgage averaged 6.06 percent, up from last week's 5.98 percent. The 15-year fixed rate mortgage followed. The popular program averaged 5.61 percent, up from 5.57 percent. Shorter-term products fell on the week. The 5-year Adjustable Rate Mortgage fell 11 basis points to 5.30 percent, down from last Monday's 5.57 percent.
This week investors will be focused on Thursday's Retail Sales Report and Friday's Consumer Price Index. Both reports have the potential to move markets.
The Retail Sales Report measures the total receipts for goods purchased at the nation's cash registers. Since, consumers make up two-thirds of economic activity, this report holds a lot of weight. Investors will be looking to see if rising Oil prices are forcing consumer to curb spending in other area. If this proves to be the case, mortgage rates may fall.
Even if the Retail Sales report helps push rates lower, the CPI report could quickly push rates back up. CPI provides us with a reading on inflation at the consumer level. If inflation is shown to be on the rise, it will not be good for mortgage rates. As we've discussed, inflation kills the value of mortgage bond securities.
Mortgage rates will probably bounce around during the week in anticipation to the Retail and CPI report. After those two reports come in, it is difficult to predict the outcome. Borrowers should lock rates at their earliest convenience.
posted by Vincent Biondillo @ 5:08 PM
0 Comments:
Post a Comment
<< Home