Do you like your economy "shaken" or "stirred"? Paraphrasing James Bond's martini preference is probably not the healthiest way to describe the US economy, but it is appropriate. Some news being released (Consumer Price Index and The Fed's comments last week) indicate a lessening of the recession. Other news (Jobless Report and Consumer Sentiment) would suggest that we still have quite a way to go before things truly get better. Our economy is/was shaken to its very foundation, but there seems to be a stirring of a recovery (sorry I couldn't help myself). All kidding aside, the two biggest components necessary for recovery are housing and employment. The housing market is showing signs of life, while employment is still on life support. And rates don't know what direction to go as a result. For the week, rates were slightly improved. So I am changing my bias on short term deals of 30 days or less from a locking to floating bias.
This week will be another busy one and could influence the direction of interest rates for the next couple of weeks. Tomorrow we will see housing starts as well as the Producer Price Index. Housing starts involve new home construction while the PPI shows us inflation at the wholesale level and I think both will meet or exceed expectations, which should help rates. Friday the National Association of Realtors will release existing home sales and this is the one to watch the closest. New home construction makes up a much smaller percentage of the housing market than existing sales do, so this is by far the more important of the two reports. A positive report here could really help interest rates and continue the run they are currently on.
Thanks for reading and I'll let you know if anything changes.
Have a great week!!
Mike
Mike Haeffner
Certified Mortgage Planner
1st Preference Mortgage Corp.
Cell (410) 375-3868
Fax (301) 363-8510