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Peter Bright 404-643-4793

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Retail Sales Rise For 7th Straight Month; Mortgage Rates At Break Point

02-16-11
Peter Bright 404-643-4793

Retail Sales (Feb 2009 - Jan 2011)

If consumer spending is a keystone element in the U.S. and Georgia economic recovery, a full-on rebound is likely underway.

Tuesday, the Census Bureau released its national January Retail Sales figures and, for the seventh straight month, the data surpassed expectations. Last month's retail figures climbed 0.3 percent as total sales receipts reached an all-time high.

It's good news for the economy which is scratching back after a prolonged recession, but decidedly bad news for people in want of a mortgage across the state of Georgia. This includes home buyers and would-be refinancers alike.

Because consumer spending accounts for the majority of the U.S. economy, Retail Sales growth means more economic growth and that draws Wall Street's dollars toward riskier investments, including equities, at the expense of safer investments such as mortgage-backed bonds.

On the heels of the Retail Sales report's release, bond prices are falling this morning. As a consequence, Georgia mortgage rates are rising. It's the same pattern we've seen since mid-November -- "good news" about the economy sparks a stock market frenzy, casuing mortgage bonds to rise.

A sampling of other recent good-for-the-economy stories include:

  • Corporate earnings are rising quickly (Marketwatch)
  • Existing Home Sales up 12% month-over-month (CNN Money)
  • The Fed says the economy looks "brighter" (Bloomberg)

The days of 4 percent, 30-year fixed rate mortgages are over. 5 percent is the new market benchmark. Unless the economy keeps showing strength. Then, that number may rise to six percent.

If you're thinking of buying or refinancing a home, consider how rising Georgia mortgage rates will hit your budget. You may want to take that next step sooner than you had planned -- if only to protect your monthly payments.

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Mortgage market update Atlanta Georgia OK to Float Now!

02-14-11
Peter Bright 404-643-4793




Monday’s bond market has opened in positive territory with the stocks mixed. The Dow is currently down 24 points while the Nasdaq has gained 5 points. The bond market is currently up 6/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point from Friday’s morning pricing.

There is no relevant economic data scheduled for release today, so look for the stock markets to be the biggest influence on bond trading and mortgage rates. The rest of the week brings us the release of six economic reports worth watching in addition to the minutes from the last FOMC meeting and two speaking appearances from Fed Chairman Bernanke.

The week’s first release is one of the highly important ones when the Commerce Department posts January’s Retail Sales data early tomorrow morning. This report is very important to the financial markets because it measures consumer spending. Since consumer spendi ng makes up two-thirds of the U.S. economy, any related data is watched quite closely. If tomorrow's report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall since it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.5% increase that is expected could lead to higher mortgage rates.

Overall, the most important day of the week will likely be Thursday with the CPI being released, but tomorrow and Wednesday will also be active days for mortgage rates due to the importance of the Retail Sales data and the number of events scheduled Wednesday. In other words, be prepared for an active week in the markets and mortgage rates, particularly the middle part of the week.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days...

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Looking for Permanent Financing? Construction to Perm Mortgage Now Available too!

02-14-11
Peter Bright 404-643-4793


Looking for Permanent Financing?
couple looking at construction Agent we have Construction Money in Georgia.
  • 80% LTV* higher on FHA VA USDA
  • No seasoning requirements for the payoff of a standard consumer held construction loan on new construction**

Learn more:

Call or email me today.
  • Jumbos available to 3 Million
  • FHA VA USDA
  • No adjustment to rate
  • Interest only and fixed terms available
  • 12 month seasoning required when paying off a home improvement construction loan
  • Less than 12 months depends on LTV
  • Appraisal update must be order from Third Party
 *Check additional market restrictions may apply
**Owner can have acted as the general contractor & all draws must be completed
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Looking for Permanent Financing? Construction to Perm Mortgage Now Available too!

02-14-11
Peter Bright 404-643-4793
Looking for Permanent Financing?
couple looking at construction Let US Refinance Customers Construction Loan Today
  • 80% LTV*
  • No seasoning requirements for the payoff of a standard consumer held construction loan on new construction**

Learn more:

Call or email me today.
  • Jumbos available to 3 Million
  • FHA VA USDA
  • No adjustment to rate
  • Interest only and fixed terms available
  • 12 month seasoning required when paying off a home improvement construction loan
  • Less than 12 months depends on LTV
  • Appraisal update must be order from Third Party
 *Check additional market restrictions may apply
**Owner can have acted as the general contractor & all draws must be completed
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A Look Ahead For Mortgage Rates This Week : Feb 14, 2011

02-14-11
Peter Bright 404-643-4793
MARKET COMMENT
Georgia Mortgage interest rates moved higher last week ending FEB 9 2011. The FED's Treasury auctions were mixed. The 3YR auction showed weak foreign demand and resulted in a sell off following the results. The 10YR auction was decent and helped keep things in check while the 30YR auction didn’t move the market much. Weekly jobless claims came in at 383k, lower than the expected 410k. That data pressured rates higher. There were some positive movements Friday morning following weaker than expected consumer sentiment data but not enough to recover all the earlier losses. Mortgage rates ended the week higher by a disappointing 3/8 of a discount point.

The Treasury will have a 30Y TIPS auction Thursday afternoon. If demand falters rates could be adversely affected. LOCK in mortgage rate in before Thursday if you can.

A LOOK AHEAD FEB 14 2011 FOR GEORGIA MORTGAGE RATES
Economic
Indicator		 Release
Date and Time		 Consensus
Estimate		 Analysis
Retail Sales Tuesday,
Feb. 15,
8:30 am, et		 Up 0.5% Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Housing Starts Wednesday,
Feb. 16,
8:30 am, et		 495k Important. A measure of housing sector strength. Weakness may lead to lower rates.
Producer Price Index Wednesday,
Feb. 16,
8:30 am, et		 Up 0.8%,
Core up 0.1%		 Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Industrial Production Wednesday,
Feb. 16,
9:15 am, et		 Up 0.7% Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization Wednesday,
Feb. 16,
9:15 am, et		 75.5% Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Consumer Price Index Thursday,
Feb. 17,
8:30 am, et		 Up 0.4%,
Core up 0.1%		 Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Weekly Jobless Claims Thursday,
Feb. 17,
8:30 am, et		 390k Important. An indication of employment. Higher claims may result in lower rates.
Leading Economic Indicators Thursday,
Feb. 17,
10:00 am, et		 Up 0.8% Important. An indication of future economic activity. A smaller increase may lead to lower rates.
Philadelphia Fed Survey Thursday,
Feb. 17,
10:00 am, et		 19 Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
WORLD RATES

China's central bank raised rates for the third time in four months to help ward off inflation as food and energy costs continue to rise. A drought in China is threatening the wheat crop, which is adding further pressure to commodity prices. Other emerging economies are also fearful of a spike in inflation. Market analysts are expecting Brazil's central bank to raise rates soon. The overnight lending rate there is currently 11.25%. In contrast, the Federal Reserve continues to add stimulus to the US economy keeping rates near zero and buying bonds.

The futures market is now pricing in a near 100% chance the Fed will move rates higher by December. Last week they put the odds of a rate increase at 25%. That is a big change in sentiment in such a short period of time. While interest rates have seen significant increases over the past few months they still remain historically very low. There are no guarantees rates will remain low as recent history has shown.

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