There were few surprises from the economic news released this week. The economic data generally was very close to the consensus forecasts, and activity levels were low during the holiday season. While daily volatility remained high, mortgage rates ended the week nearly unchanged from last week.
After reaching record lows in early November, mortgage rates have since increased, although they remain at historically low levels. The rise in mortgage rates can be attributed primarily to a good thing, increasing expectations for future economic growth. The trend in most economic measures over the last few months has generally shown improvement, and the passage of the tax deal last week is expected to provide an additional boost. A growing economy creates jobs and increases the demand for homes, but it also leads to higher inflation, which is negative for mortgage rates.
The housing sector data released during the week was positive. November Existing Home Sales rose 6% from October, and inventories of unsold existing homes fell 4% to a 9.5-month supply. November New Home Sales also increased 6% from October.
As usual, the Economic Calendar will be light during the final week of the year. Consumer Confidence will be released on Tuesday. The Chicago PMI national manufacturing index will come out on Thursday. Pending Home Sales, a leading indicator for the housing market, is also scheduled for Thursday. There will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will close early on Friday in observance of the New Years holiday.
After reaching record lows in early November, mortgage rates have since increased, although they remain at historically low levels. The rise in mortgage rates can be attributed primarily to a good thing, increasing expectations for future economic growth. The trend in most economic measures over the last few months has generally shown improvement, and the passage of the tax deal last week is expected to provide an additional boost. A growing economy creates jobs and increases the demand for homes, but it also leads to higher inflation, which is negative for mortgage rates.
The housing sector data released during the week was positive. November Existing Home Sales rose 6% from October, and inventories of unsold existing homes fell 4% to a 9.5-month supply. November New Home Sales also increased 6% from October.
As usual, the Economic Calendar will be light during the final week of the year. Consumer Confidence will be released on Tuesday. The Chicago PMI national manufacturing index will come out on Thursday. Pending Home Sales, a leading indicator for the housing market, is also scheduled for Thursday. There will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will close early on Friday in observance of the New Years holiday.
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