WITH MORTGAGE RATES SLIGHTLY SOARING, HOUSING DATA IS EXPECTED TO SIGNIFICANTLY INFLUENCE THE RATES NEXT WEEK
The European Central Bank meeting and U.S. economic data this week was full of positive news, but saw a slight surge on mortgage rates. Additionally, inflation data released saw a minimal effect to the market. The CPI, a report on inflation, went up to 2.2% - a value lower than last month’s 2.4%.
In addition, the retail sales report released saw mixed reaction when the news hit the market. In August, retail sales went up by 0.3% compared to July. This value was lower than the consensus of 0.5%. The data was neutral when it comes to the mortgage rates because the July values were revised higher by a value that is quite similar to the August shortfall.
The European Central Bank meeting on Thursday did not initiate any significant reaction. It had no effect on the U.S. mortgage rates, something different from last year. The ECB meeting lowered their economic growth projections both this year and next. In addition, they promised to finish up on their 2.5 trillion euro bond this year.
The ECB meeting also concluded that the current interest rates will hold until summer 2019.
At least, what we can infer from the current trend is that the housing data will soon become the main market trigger. The NAHB confidence index will be released next week on Tuesday. The housing stats will follow on Wednesday whereas the existing data on home sales will come out on Thursday.
Lower rates attract borrowers and will help initiate housing activity. However, due to the unavailability of something to buy many would-be buyers have given up. This implies that the sluggish housing market will not be so a story unto itself. Analysts have varied thoughts on the expected market trajectory with some hinting a possible drag on the overall economic growth in the near future.
Call Core Mortgage Financial today, we watch the mortgage market and will continue to make sure our clients mortgage rates are secure.