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Economic News
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Kenton Becker
Loan Officer
Office: (206) 423-2552
NMLS #123961 ,
Washington #MLO-123961

Events Last Week:

Retail Sales Rose
Housing Starts Down
Jobless Claims Fell
Manufacturing Up

Events This Week:

Mon 7/22
Existing Sales

Tue 7/23
2-yr Auction

Wed 7/24
New Home Sales
5-yr Auction

Thur 7/25
Durable Orders
7-yr Auction

 

 

 

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landhome

Retail Sales Below Target

Weaker than expected Retail Sales data helped mortgage rates last week. Soothing comments from Fed Chief Bernanke also were a positive influence, and mortgage rates ended the week lower.

The monthly Retail Sales report measures spending by consumers, which accounts for about 70% of economic activity. Monday's report revealed that Retail Sales were higher in June than in May, but the increase was much smaller than expected. The shortfall caused economists to lower their forecasts for second quarter GDP. When economic growth indicators are below the consensus forecast, future inflation expectations are reduced, and this is favorable for mortgage rates. As has often been the case in recent months, the reaction in mortgage rates was magnified somewhat by the importance of incoming data on future Fed policy.

On Wednesday and Thursday, Bernanke answered questions before Congress in the regularly scheduled semi-annual testimony. Overall, there were no significant surprises in Bernanke's comments, but his tone was a bit more dovish than in previous communications, which helped mortgage rates. He emphasized that the Fed's bond purchases are not on a "preset course", but rather will depend on future economic data. While his comments caused investors to push back their expectations for when the Fed will begin to taper its bond purchases, the comments also added to the uncertainty about the timing, which means that mortgage rates likely will remain very volatile in coming months.

Also Notable:
  • NAHB Home Builder Confidence jumped to the highest level since January 2006
  • Core CPI inflation was 1.7% higher than one year ago
  • Philly Fed rose to the highest level since March 2011
  • Oil prices rose to the highest level since March 2012

graph

 
Average 30 yr fixed rate:
Last week: -0.25%
This week: -0.10%
Stocks (weekly):
Dow: 15,525 +25
NASDAQ: 3,580 +10
 

This Week

Existing Home Sales will be released today, Monday. New Home Sales will come out on Wednesday. Durable Orders will be released on Thursday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. Investors also will be looking ahead to a big day on July 31 when the next Fed meeting will take place and the second quarter GDP report will be released.

©2013 MBSQuoteline

landhome
Equal Housing Opportunity Lender. Rates, Program, Fees, and Guidelines are subject to change without notice. Not a commitment to lend. Land Home only conducts business in states we are approved to. Land Home Financial Services, 22525 SE 64th Place, Suite 220, Issaquah, WA 98027. Washington Consumer Loan License #CL-89331. NMLS ID # 89331. Kenton Becker Licenses: NMLS #123961; Washington #MLO-123961. You are receiving this communication because of an existing and/or past business relationship, or because you have consented to receive communications from Land Home. 07-22-13  

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