Economic Reports
Home Affordability Increases On Weak Retail Sales Data
May 14, 2009 by James K Barath, CMPS · Leave a Comment
Home affordability improved again Wednesday after the government reported worse-than-expected results for April’s Retail Sales report.
Mortgage rates edged lower for the third consecutive day.
The impetus for the rate rally this week may be a long-awaited stock market correction. After touching multi-year lows in mid-March, the Dow Jones added 30 percent going into last Friday.
It has since lost close to 300 points and as those dollars leave the stock market, they’re finding their way toward bonds.
The demand is pushing bond prices up which, in turn, causes rates to fall.
Yesterday morning, the rally in rates picked up steam on the heels of April’s Retail Sales report. With figures off a half-percent from March and roughly 7 percent from 2008, investors are concerned that consumer spending may not be as strong into the summer months as previously expected.
Consumer spending is important because it comprises two-thirds of the economy and is believed to be the way out of the current recession.
If expectations of a recovery caused mortgage rates to rise recently, it makes sense that a revision of those expectations would cause rates to fall.
Markets are fickle, however, and the slightest bit of “good news” could pump cash back into stocks at the expense of bonds. Until then, however, enjoy the low rates — they may not last long.
About the Author: James K Barath is a Certified Mortgage Planning Specialist and your Northwest Indiana FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James K Barath today and Get Qualified for Your FREE FHA Home Loan Approval!
His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy! 
