U.S. Outlook: Shifting prices create new winners

Chief Economist

This week we’ve seen a dramatic illustration of the cross currents impacting the U.S. economy, and a good indicator of how the year is likely to shape up.

Graph showing the rise in consumer confidence.Right now the winners include the U.S. consumer and housing market.

For a detailed look at this and other developments, see my full weekly analysis. Highlights are outlined below, followed by a link to the full U.S. Outlook report, delivered on Jan. 30.

Key observations:

  • Recent readings of consumer confidence suggest the consumer will have more staying power this year.
  • The oil price shock is a net positive for the U.S. consumer and in turn a net positive for the U.S. economy.
  • Unexpectedly low mortgage rates early this year are bolstering mortgage applications.
  • A downside: Exporting manufacturers now need to deal with sluggish global growth and a far stronger U.S. dollar

Click here to read my full report.

Numbers Count: Weekly mortgage data highlights

Posted by Chad Royle
Mortgage Banking

Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

The numbers: Refis dip, and rates inch upward

Closeup on the top of a blank mortgage refinance loan application with a black pen sitting on it.Mortgage applications inched down last week as interest rates inched up, the Mortgage Bankers Association (MBA) said Jan. 28 in its weekly survey of mortgage activity. Mortgage applications — both refinancing and home purchase demand — fell 3.2% in the week ended Jan. 23. The MBA’s refi index fell 5%, and purchase applications were down just 0.1%. Fixed 30-year mortgage rates averaged 3.83% in the week, up from 3.80% in the previous week.

What counts: If the Federal Reserve begins to raise rates this summer as many expect, you may not want to look back and say, “If only I’d explored refinancing options when the rates were lower.” Now may be a particularly opportune time to talk to a lender about a fixed-rate mortgage if you are a homeowner with an adjustable-rate mortgage or with a large home equity line of credit with adjustable rate that will likely rise if the Fed raises rates. As I said recently in a Bankrate.com interview, it may be to people’s advantage to be proactive than be in a reactive mode after rates rise.