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Rate Update

Generally positive economic data led mortgage rates higher and boosted stocks for a third week in a row. In a surprising statement today, the National Bureau of Economic Research declared the longest US recession since the Great Depression ended in June 2009, lasting only 18 months. Hmmm… we’re guessing the 15 million unemployed Americans might disagree with that announcement. Nevertheless, continued low inflation, improving consumer spending and job numbers are leading investors back into US equities. Retail Sales climbed in August for a second consecutive month. Purchases increased 0.4% following a 0.3% gain in July. Retail Sales are an important leading indicator as consumer spending accounts for 70% of total economic activity. The Core Producer Price Index was up 0.1% and the Core Consumer Price Index was unchanged, both in-line with expectations. Jobless Claims were down 3,000 to 450,000, a 2-month low, and the 4-week moving average is also trending down. Currently, the 30-Year Fixed is at 4.000% (4.141% APR) and the 15-Year Fixed is at 3.625% (3.874% APR). The biggest story this week will be tomorrow’s Fed meeting. No change in the fed funds rate is expected, but every word and sentence will surely be dissected. Also, this week we have Housing Starts, Existing Home Sales, Leading Economic Indicators, Durable Goods Orders, and New Home Sales.

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