Mortgage Rate Update June 14, 2011

Mortgage rates are worse this morning.

The economic data out this morning wasn’t exactly robust but contrary to recent reports the data wasn’t below analysts’ expectations.  With the outlook on the recovery so bleak a moderate report is seen as optimistic news!

The monthly retails sales report was released this morning and showed that retails sales fell by .2% last month.

There were more mall rats than expected last month

However, if you back out volatile auto sales then retail sales actually grew by .3%.  Analysts had been expecting a more severe drop.

In a separate report prices at the wholesale level of the economy were reported to have increased in line with expectations last month.  Overall, the report showed tame inflationary pressure which is a good sign for mortgage rates.

US stocks are trading higher on the retail sales report which is punishing interest rates.  Tomorrow brings more inflationary data and figures on manufacturing activity.  It will be interesting to see if the retail sales report is an outlier or a signal that the recovery is back on track.

Current Outlook:  locking bias