Mortgage rates remain low this morning.
Following yesterday’s major announcement on the part the Federal Government that caused rates to sink we got a large dose of economic data this morning. Here is a summary of the data that was released:
*Durable Goods orders: DGO’s showed a sharp plunge in October. Analysts were expecting a drop of 2.5% but the report indicated they actually sank 6.2%. This is bad news for the economy but good news for mortgage rates.
*Initial jobless claims: although this week’s weekly gauge for IJC’s was not as bad as expectations the much-watched 4-week moving average hit a 25-year high. This is bad news for the economy but good news for mortgage rates.
*Inflation: The Fed’s favorite gauge of inflation (PCE index) reported a tame 2.1% year-over-year increase for the Core reading. This is also rate friendly news.
*Personal incomes/ spending: The one bright spot in this morning’s onslaught of reports was the personal income report. The report indicated that personal incomes rose by .3% in October which was greater than expectations. However, households did not use the extra money to consume. Personal spending fell by more than expected as consumers increased their savings ahead of economic uncertainty. This is a sign that US households are “deleveraging” as we began blogging about last month.
‘Rate Update’ will taking a holiday tomorrow and Friday. Happy Thanksgiving!
Current outlook: neutral- definitely a great opportunity to lock