Looking for the best mortgage rates in Raleigh, NC? Well, on Friday, you had some help! The Mortgage Interest Rate Forecast for Raleigh NC April 2013 is looking very similar to what happened last Spring.
“Friday’s Employment report was disappointing in nearly every area. Against a consensus forecast of 190K, the economy added just 88K jobs in March. Average Hourly Earnings, a proxy for wage growth, was flat from last month. Digging deeper, the small bit of good news was that the data from the prior two months was revised higher by 61K jobs. ”
This was far outweighed, however, by the bad news in the details of the Unemployment Rate. The Unemployment Rate unexpectedly dropped from 7.7% to 7.6%, but the decline was entirely due to people exiting the labor force. It is good for the economy if the Unemployment Rate declines because more people get jobs, but not if the cause is a shrinking labor force. Weak labor market data reduces future inflation expectations, which is good for mortgage rates. In addition, it likely extends the duration of the Fed’s bond-buying program, which is also good for mortgage rates. In general, we tell folks that BAD NEWS in the Economy is GOOD NEWS when it comes to mortgage rates… so if the labor report (which comes out on the First Friday of every month) is BAD – mortgage interest rates go down.
But that’s not the ONLY thing that moved mortgage interest rates last week. Thursday, Bank of Japan announced that it will sharply ramp up its bond purchases to levels which will add $1.4 trillion to its balance sheet over the next two years.
This means that in essence, the Bank of Japan is doing the same thing Bernanke has been doing with QEIII (and QE II for that matter). Like the Fed, the BOJ is buying bonds to help boost the economy. This added demand for Japanese bonds caused their yields to decline, making US bonds relatively more attractive to global investors.
This benefited US mortgage-backed securities (MBS), which helped push mortgage rates lower.
In addition to the awful Jobs report and the move from the Bank of Japan… South Korea’s 29 year old dictator has been banging around and making demands. The Global implication of his moves, for instance he told England to close it’s Embassy there, made the market even more jittery. Mortgage Securities that have a guarantee from the Government became more interesting to Investors in a “security” move – driving mortgage rates lower.
THIS WEEK: Mortgage Interest Rate Forecast for Raleigh NC April 2013 There are many reports coming out this week that could move mortgage interest rates. the detailed Minutes from the March 20 Fed meeting will be released on Wednesday. Import Prices will come out on Thursday. Friday will be the big day with PPI, Retail Sales, and Consumer Sentiment.
The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products. Retail Sales account for about 70% of economic activity. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.
Last year, mortgage interest rates went down in April, May and June to their lowest levels. My feeling is that we could see the same thing this year. Plus, as gas prices continue to drop, Consumers will have more disposable cash… I don’t think most Economist are looking at the cost of Gas and it’s IMMEDIATE impact on Consumer Spending.
In my mind, that’s what is causing these big swings in our Economy. So, if I’m right – we will have a couple more bad Labor reports, then Consumer Spending numbers (which are lagging indicators) will show strength, and rates will go back up in July or August.
If you are looking for today’s best mortgage interest rate, or have questions about Mortgage Interest Rate Forecast for 2013 – call Steve Thorne 919 649 5058. We know what is driving the market, and we offer the programs you need!