Last Week in Review: Retail sales and weekly jobless claims numbers disappointed, but home loan rates remain near record lows.
Forecast for the Week: After Monday's market closure for Presidents Day, look for important housing, manufacturing and inflation reports.
Last Week in Review
"Slippin', slippin', slippin' into the future." The Steve Miller Band may have been singing about time, but the lyrics also apply to retail sales of late.
Retail sales in January fell by 0.8 percent, more than expected, as Americans spent less on gas at the pumps but didn't purchase goods and services with the extra savings. Retail sales have now declined three out of the last five months.
The Retail Sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the most-timely indicator of broad consumer spending patterns and is a key factor to watch in our economic recovery.
Also of note, Initial Jobless Claims rose by 25,000 in the latest week to 304,000, topping the 300,000 mark for the first time in six weeks. The rest of the week was quiet heading into Presidents Day weekend, with Stocks reacting positively to some strong earnings reports and news of a ceasefire in Ukraine. Mortgage Bonds attempted to hang on to recent highs.
The bottom line is that home loan rates remain attractive, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. I can be reached at email@example.com.
Forecast for the Week
After Monday's Presidents Day holiday, the economic calendar is packed with important news on housing, inflation and manufacturing.
- Key housing reports are ahead this week, beginning on Tuesday with the National Association of Home Builders Housing Market Index. On Wednesday, look for Housing Starts and Building Permits.
- Manufacturing data from the Empire State Index will be delivered on Tuesday, while the Philadelphia Fed Index comes out on Thursday.
- Wednesday brings a read on inflation at the wholesale level via the Producer Price Index.
- Weekly Initial Jobless Claims will be reported, as usual, on Thursday.
In addition, the minutes from the January meeting of the Federal Open Market Committee will be released on Wednesday, and these always have the potential to add volatility to the markets.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.
By: Michael Borodinsky
Vice President/Regional Builder Branch Manager | Caliber Home Loans
Call Michael: 732-382-2654
Email Michael: firstname.lastname@example.org