|The Week in Review – July 4th 2014
“Help! I’ve fallen and I can’t get up!” The Federal Reserve has been working hard helping our economy recover from the recent recession; we still need to keep our eye on some key reports that are rather disappointing. It has been six years and over $4 trillion in stimulus aimed at promoting economic growth, the final reading for 2014 first quarter Gross Domestic Product (GDP) came in at an sickly -2.9 percent. Worse than expected and the worst reading since first quarter of 2009, the height of the recession. The report showed consumer spending fell to 1 percent from 3 percent. Consumer spending is the main driver of our economy. Many feel that harsh winter weather early in the year was a key factor in the contraction. GDP is the broadest measure of economic activity, so second quarter data will be especially important to see if the Spring and better weather show improvement. Watch for that at the end of July. Housing is still a bright spot as New Home Sales for May increased by 18.6 percent to an annual rate of 504,000, well above expectations. Existing Home Sales for May were also up 4.9 percent from April, reaching their highest monthly rate since August 2011.
What does this mean for you and your home loan rates? The weak GDP report, tame inflation news and a decline in Stocks boosted Mortgage Bonds last week. Because home loan rates are tied to Mortgage Bonds, home loan rates reached some of their best levels this year.
The bottom line is that now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions for you or your clients.
Even though we are In a short Holiday week, tomorrow we need to keep our eye on the Weekly Initial Jobless Claims and the June Jobs Report which includes the Non Farm Payrolls and the Unemployment rate.
Bonds and home loan rates are at some of their best levels this year.
However, the June Jobs Report TOMORROW could be a market mover and I’ll be watching all the news closely to see what happens.
All markets will be closed Friday, July 4th for the Holiday.
Happy 4th of July!