Mortgage Market Commentary
In spite of a better-than-expected Retail Sales report, mortgage rates managed to inch slightly downward again last week. The 1.3 percent increase in Retail Sales was a bit of a relief for some analysts. There had been some chatter that consumer attitudes may begin to fade, accompanied by a pullback in the level of consumer spending. Even removing the volatile auto-related issues, Sales managed a healthy 0.6% increase. However, this positive economic news was not enough to lift mortgage rates. Many technical factors, including a huge week of corporate bond issuances, kept competitive pressures high in all the bond markets, which helped hold prices down.
Mortgage rates have remained in a very tight range over the last couple of months, and this week is unlikely to break that pattern. However, it is worth watching the Consumer Price Index, given that last week’s PPI core reading was once again higher than expected. Even if the core CPI surprised on the high side, a dovish sounding Fed, in the release of its latest minutes, could push rates downward.
Courtesy of Happy Chang Princeton Capital