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With Fed policy tightly linked to incoming data, the economic reports were the main influence this week. The major reports were weaker than expected, which was disappointing news for the economy, but good news for mortgage rates. As a result, mortgage rates ended the week a little lower.

After three months of declines, retail sales rebounded in March, but by less than expected. Retail Sales ex-Auto, a measure which excludes the effects of swings in volatile auto sales, rose 0.4% in March. The consensus was for a much larger increase of 0.7%. With pent up demand from bad weather, low gas prices, and solid job gains, it was surprising that consumer spending was not stronger.

With so much uncertainty about the timing of the first federal funds rate hike, comments from Fed officials are having a significant impact on mortgage rates. Thursday was a prime example. Fed Vice Chair Fischer’s speech caused mortgage rates to climb early in the session. After three more Fed officials were finished speaking later in the day, however, mortgage rates had recovered their losses. This volatility is likely to continue in the weeks and months ahead.

The housing data released this week was mixed. Fortunately the more current data was encouraging, while the older data, impacted by bad weather, was disappointing. The National Association of Home Builders (NAHB) confidence index for April rose nicely from March, indicating home builders see the market continuing to improve. The Commerce Department’s report on housing starts and building permits in March fell far short of expectations.

Next week will be a very light one for economic reports. Existing Home Sales will be released on Wednesday, and New Home Sales will come out on Thursday. Durable Orders, an important indicator of economic activity, will be released on Friday. Investors also will be watching for signs of progress between Greek and eurozone officials on reform measures for Greece. Experts are divided about whether Greece will reach an agreement or will ultimately exit the European Union.

If you looking to purchase or refinance a home in North Carolina, call 919-866-0212 now or apply online at our website http://www.raleighmortgagegroup.com.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Raleigh Mortgage Group, Inc.

NMLS# 69573

Phone: 919.866.0212 • Fax: 919.866.0262

Email: bgrubbs@raleighmortgagegroup.com • Website: www.raleighmortgagegroup.com

5306 Six Forks Road, Ste

213

Raleigh, NC 27609


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With little connection to this week’s economic data, large swings in mortgage rates were seen. Rising rates dominated the first few days, while much of that was reversed on Thursday and Friday. Mortgage rates ended the week a little higher.

To understand this week’s market action, it is helpful to look at long-term trends. In recent months, bond yields in Europe generally dictated the direction of yields around the world. A sluggish economic growth outlook and a new sovereign bond purchase program from the European Central Bank caused investors to view European bonds as promising assets. Yields declined to record low levels in Germany and many other European countries.

Eventually, however, investor sentiment shifted, sparked by signs of improving economic conditions and reduced concerns about a default on Greek debt. The resulting increase in European yields seen this month has dragged global bond yields, including those of US mortgage-backed securities, higher at a rapid pace. It has overwhelmed this month’s weaker than expected US economic data, which normally would result in an improvement in mortgage rates.

While retail sales activity in March showed signs of rebounding from a winter slump, the April Retail Sales report released this week revealed that the momentum did not continue. Retail sales in April, excluding the volatile auto component, increased slightly from March, but fell far short of the expected level. Lower gas prices and pent up demand from the winter did not have the anticipated impact on consumer spending in April.

Next week will begin with housing data including the NAHB housing confidence index on Monday and Housing Starts on Tuesday. The FOMC Minutes from the April 29 Fed meeting will be released on Wednesday. These detailed notes provide additional insight into the debate between Fed officials. Existing Home Sales will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for finished goods which are sold to consumers.

If you looking to purchase or refinance a home in North Carolina, call 919-866-0212 now or apply online at our website http://www.raleighmortgagegroup.com.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Raleigh Mortgage Group, Inc.

NMLS# 69573

Phone: 919.866.0212 • Fax: 919.866.0262

Email: bgrubbs@raleighmortgagegroup.com • Website: www.raleighmortgagegroup.com

5306 Six Forks Road, Ste 213

Raleigh, NC 27609


Category: American mortgage

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