While there was some volatility, it was relatively quiet last week for mortgage rates. The major economic data was mixed. In a nice break from the recent upward trend, mortgage rates ended last week with little change.
Housing Starts: The latest report on housing starts was encouraging. In January, single-family housing starts rose 4% from December. They were 8% higher than a year ago. A lack of inventory has been holding back home sales in many regions, so it’s good to see those home builders appear to be picking up the pace of construction.
Retail Sales: Unlike the housing data, the report on retail sales was disappointing. Excluding the volatile auto component, retail sales in January were flat from December, which was far below the expected increase of 0.5%. the results of December were revised significantly lower as well. Since weaker economic growth reduces the outlook for future inflation, this data was positive for mortgage rates.
Inflation: Offsetting the weakness in retail sales, an upside surprise in the latest report on current inflation levels was decidedly negative for mortgage rates. In January, the core Consumer Price Index (CPI), which excludes the volatile food and energy components, rose 0,3% from December, which was higher than expected. Core CPI was 1.8% higher than a year, which also was a faster rate of increase than expected. Bond yields, including mortgage rates, must rise to offset inflation.
written by Mark Cohen of Cohen Financial Group firstname.lastname@example.org
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To find out if the shelter is open each night, call the BWS Hotline at (888) 915-8111. For all other questions, call(626) 797- 2402.