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Consumer spending continues to rise nationwide, fueled by jobs growth and a rosier outlook for the U.S. economy. Unfortunately for mortgage rate shoppers |*STATE in % STATE**|, it may also lead to higher mortgage rates later this week.
Thursday morning, the Census Bureau will release its U.S. Retail Sales data for December. The report is expected to show an 18th consecutive monthly increase, with analysts projecting sales volume higher by 0.4 percent from November.
This would be double the increase from last month, which saw a 0.2 percent increase in Retail Sales.
The Retail Sales report tallies receipts collected by retail and food-service stores nationwide. When the sum of these receipts rise, it puts pressure on mortgage rates to do the same. The connection is straight-forward.
Retail Sales are the largest part of “consumer spending” and consumer spending accounts for the majority of the U.S. economy — up to 70 percent, by some estimates.
As the economy goes, so go mortgage rates.
Remember: today’s ultra-low mortgage rates have been partially fueled by weak economies — both domestic and abroad — going back 4 years. Stock markets have sold off as economies have faltered worldwide, leading investors to seek refuge in the relative safety of U.S.-backed mortgage bond market. The new-found demand for mortgage-backed bonds has helped drop mortgage rates to levels never seen in history.
When economic recovery is apparent, therefore, we should expect a mortgage rate reversal, and should expect for it to happen quickly. Stock markets should rise; bond markets should fall. Mortgage rates will climb. Rate shoppers will lose.
Last week’s strong jobs report sparked hope for the U.S. economy. If Thursday Retail Sales data reveals similar strength, the risk in “floating” your mortgage rate may be too great. The safer play is to lock your rate today.
The Retail Sales report will be released at 8:30 AM ET.
Don Grimes, Senior Mortgage Loan Officer with Amera Mortgage Corporation has focused in the home purchase market for over 25 years and the majority of his business comes from Real Estate agents, customer referrals and repeat clients. He is licensed in the state of Michigan and his office is with Amera Mortgage which is located in East Lansing, home of Michigan State University, just 65 miles west of Detroit. He has partner up with ePropertysites. The number one real estate marketing company in the world, based here, in our own backyard, in the Lansing Area.
ePropertysites is an amazing, simple to use marketing platform.Basically It allows agents to "broadcast to the world" creating an ad for the internet about themselves and the properties. It is quick easy and effective and best of all "on hands training is provided".
So Don Grimes is not only able to offer her clients a first class financial service, but also a first rate marketing team to his agents.
If you are looking for a Home Loan Mortgage Advisor and a Marketeer, please call Don Grimes at (800) 249-4113.
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