March 19, 2014 at 5:56 PM
"No matter how long the winter, spring is sure to follow." -Proverb.
This winter certainly has been a long one for much of the nation, with many hoping spring makes a quick arrival. As temperatures slowly begin to thaw, recent economic reports reflect an economy in bloom.
After falling for two months, Retail Sales rose by 0.3 percent in February, above expectations, as consumers purchased a variety of goods despite the harsh winter weather. This is important because Retail Sales make up about one-third of consumer spending, which is the main driver behind economic growth. If consumer spending can continue to expand, economic growth could go beyond the recent 2 percent levels we have seen the past few years. This will be good news for our economy.
The labor market also showed signs of life last week, as Initial Jobless Claims fell to 315,000, the lowest level since the end of November. And there was good news on the housing front, as RealtyTrac reported that foreclosure filings in February declined by 10 percent from January, and are down a whopping 27 percent from the same period last year. What does this mean for home loan rates? Typically, good economic news benefits Stocks at the expense of Bonds, as investors try to take advantage of gains.
However, fears of an economic slowdown in China and tensions in the Ukraine helped Mortgage Bonds improve due to safe haven trading. And as home loan rates are tied to Mortgage Bonds, this was good news for rates as well. In addition, it's important to remember that the Fed is now purchasing $35 billion in Treasuries and $30 billion in Mortgage Bonds (the type of Bonds on which home loan rates are based) to help stimulate the economy and housing market. This is down from the original $85 billion per month that the Fed had been purchasing.
The Fed is meeting again this week, and additional tapering could be announced on Wednesday. This decision is sure to impact the markets and home loan rates, and it's an important story to monitor. The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.
This column takes a look at current mortgage rates, market trends and indexes. Jon Lamkin is Vice President of Mortgage Lending for Guaranteed Rate, 322 Route 46 W Suite 170 • Parsippany, NJ • 07054. He may be reached at 973.939.8661 / email@example.com / www.guaranteedrate.com/jonlamkin
The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.