Current interest rates are:
3.97% - average rate for a 30-year fixed rate mortgage
3.20% - average rate for a 15-year fixed rate mortgage
Americans can thank the Eurozone’s shaky economic situation for extremely low interest rates that seem to have no floor. But now the question is, ‘can rates hold at this record low rate, or will they begin to trend upward’? There are a variety of economic reports out this week that could have an impact. Below is an overview of this week's most important economic activity.
Tuesday: April Retail Sales
Tuesday: Consumer Price Index
Wednesday: April Housing Starts
Wednesday: Fed Meeting Minutes
In an economy where spending accounts for 70% of the activity increases are a good thing. Experts were expecting very small gains to the tune of 0.2% and that’s exactly what they got when volatile gasoline sales were taken out of the equation. It’s not a very strong start of the second quarter.
And what about inflation on those things people are buying? The Consumer Price Index found measurements for April were changed since March when there was a 0.3% rise. The flat rate is being contributed to gas priced which dropped during April. However, the 12-month ‘core’ value, which factors in food and gas, has 2.3%. Slightly higher than the Fed’s 2% inflation comfort zone.
There was good news in the April Housing Starts report after a few months of disappointing numbers. Homes.org will be providing full coverage and comparisons of housing starts in a special report tomorrow.
Due to the low level of inflation in the Consumer Price Index and the weak consumer spending, the Homes.org mortgage team is predicting that mortgage rates will stay flat this coming week for both 30 year fixed-rate mortgages and 15 year fixed-rate mortgages.
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