consumer

Looking Back And Looking Ahead : April 28, 2008

April 28, 2008

Mortgage markets lost ground last week on inflation concerns and a general feeling that “the worst may be over” on Wall Street. As investors moved money into the stock market, mortgage rates ticked higher for the second straight week. The biggest story from last week was the rising cost of gasoline. Rising energy costs combined with rising […]

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Looking Back And Looking Ahead : April 14, 2008

April 14, 2008

Through 5 days of see-saw trading, mortgage rates ended last week relatively flat; the downward tick into Friday’s close was a boon for home buyers this past weekend. It may be short-lived, however. Oil continues to sit near all-time highs and a slew of inflation-related data is crossing the wires this week. When inflation pressures are […]

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What 98 Percent Of Traders Think About The Fed’s Next Move

April 9, 2008

In three weeks, the Federal Open Market Committee will meet again and markets anticipate another cut to the Fed Funds Rate. Based on data compiled by the Federal Reserve Bank of Cleveland at the close of business yesterday, traders put the probabilities of the Fed’s next move at: 62 percent chance that the Fed Funds Rate falls to […]

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A Simple Explanation Of “Credit Crunch”

April 8, 2008

News sources like to use the term “credit crunch” in describing the U.S. economy, but they rarely define what a credit crunch is and what it means for Americans. A credit crunch is when the amount of available loans suddenly decreases over a very short period of time. Usually, it follows a period of lending which, […]

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Looking Back And Looking Ahead : April 7, 2008

April 7, 2008

Mortgage rates edged lower last week, buoyed by a weak employment report for March. After shedding 80,000 jobs last month, the number of working Americans is lower by 232,000 so far this year. Many pundits are claiming these figures are proof of a U.S. economic recession but it’s important to keep the data in perspective. […]

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How Mortgage Rates Benefit From 3 Months Of Worsening Employment Data

April 4, 2008

For the third month in a row, the economy shed jobs, suggesting that the U.S. is in a recession. March’s monthly loss of 80,000 jobs is the largest since March 2003 and follows January and February’s losses of 76,000 each. The weak data is edging mortgage rates lower as we head into the weekend. The […]

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The Small Statistic Within Consumer Confidence That Didn’t Show Up On The News

March 26, 2008

Consumer Confidence fell to its lowest point in three years and anybody who watches the evening news can understand why. Each day, news programs barrage Americans with tales of economic woe and American Opinion is largely shaped by the media. After enough time, the reporting becomes a self-fulfilling prophecy. But, in the Consumer Confidence report, there […]

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Looking Back And Looking Ahead : March 24, 2008

March 24, 2008

Conforming mortgage rates edged slightly lower for the second week in a row. Mortgage rates fell for two main reasons: The Federal Reserve offered fiscal support for troubled mortgage-backed securities A government group gave Fannie Mae and Freddie Mac permission to lend more of money to American homeowners These two actions combined to make mortgage-backed securities safer […]

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Looking Back And Looking Ahead : March 17, 2008

March 17, 2008

Mortgage rates fell last week on growing evidence of a recession, but far fewer Americans were eligible to take advantage. Mortgage lenders continue to reduce product menus and that is leaving homeowners with fewer mortgage financing options than before. As an added hurdle, Fannie Mae and Freddie Mac recently added “risk-based” fees on all conforming […]

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Looking Back And Looking Ahead : March 10, 2008

March 10, 2008

Between Tuesday and Thursday, mortgage rates rose as much as during any three-day period in recent memory before settling back a bit on Friday’s jobs data. Fourteen speeches from members of the Federal Reserve were partly to blame for the mortgage rate chaos, but several other factors played a part, too. One of the biggest […]

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What High Oil Prices Mean To Mortgage Rates

March 4, 2008

After briefly exceeding its all-time high, oil closed Monday at $102.45. Rising energy costs can lead to inflation because American Business eventually passes on its higher costs to American Consumers. When consumers have to spend more money for the same amount of product, it’s called “inflation”. Another way to look at inflation is like an erosion […]

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Looking Back And Looking Ahead : February 19, 2008

February 19, 2008

Early last week, mortgage rates rose on strong consumer spending and Warren Buffett’s offer to assume $800 billion in debt from three major bond insurers. Both reports were interpreted as signs of long-term strength in the economy, leading mortgage rates higher for long-term products such as the 20- and 30-year fixed rate mortgage. Meanwhile, Fed […]

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Looking Back And Looking Ahead : February 4, 2008

February 4, 2008

We entered the New Year uncertain of the country’s economic future. With January over, it’s a little more clear. Last week’s data and events helped firm expectations. In the near-term, we can expect weakness: The economy is shedding jobs Consumer sentiment is low Home sales continue to slump nationally In the intermediate-term, however, the picture […]

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The Week In Review (January 28, 2008) : What To Watch For

January 28, 2008

Mortgage rates change from day-to-day, but last week’s volatility was a record-breaker. After drooping through Tuesday and then skyrocketing Wednesday and Thursday, mortgage rates retreated slightly on Friday. By weeks’ end, rates were at their same levels from mid-December. This is in contrast to Tuesday, just after the Fed’s rate cut and before the stock […]

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Which Leads Which Lower: Mortgage Rates Or The Fed Funds Rate?

January 16, 2008

It’s a point that’s always worth repeating: Ben Bernanke and the Federal Reserve do not control mortgage rates This is particularly relevant today as newspapers, television programs, and market pundits posit that the U.S. is in the midst of a recession. The latest evidence supporting that assertion is that Retail Sales grew at its slowest […]

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The Week In Review (January 14, 2008) : What To Watch For

January 14, 2008

Markets are welcoming the return of cold, hard data this week. Most of last week was spent making sense of Fed speakers, recessionary fears, and a takeover of the nation’s largest lender. This week, we’ll find out if the recent fears of recession are on target, or overblown. The data deluge starts Tuesday with the […]

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Americans Are $6.25 Billion More Wealthy Since September Because Of The Federal Reserve

January 8, 2008

Since September 2007, the Federal Reserve has lowered the Fed Funds Rate by 1.000%. This has caused Prime Rate to fall by 1.000%, too.  This is because the Fed Funds Rate and Prime Rate are directly related. In mathematical terms, the relationship looks like this: (Prime Rate) = (Fed Funds Rate) + (3.000%) So, because […]

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Why It’s Not So Bad That Unemployment Reached Its Highest Rate Since November 2005

January 4, 2008

On the first Friday of each month, the Bureau of Labor Statistics releases key data about the American workforce. The report is officially called “Non-Farm Payrolls” but most people refer to it as the “jobs report”. The jobs report’s influence on markets is palpable for two major reasons: Consumer spending makes up two-thirds of the […]

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$100 Oil Could Mean More Than High Gas Prices For Americans

January 3, 2008

The price of oil briefly touched $100 per barrel yesterday, just short of the all-time inflation-adjusted high of $102.81 in April 1980. According to economic forecasting firm Global Insight, each $10-per-barrel increase in oil prices: Increases gas prices by 19 per gallon Cuts consumer spending by one-third of a percent Reduces employment by 100,000 Adds […]

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Holiday Spending APPEARS To Be Lower, But It Isn’t Really Lower

December 26, 2007

During the Holiday Season, economists watch consumer spending intently because it makes up two-thirds of the U.S. economy. When spending is stronger-than-expected, it can lead to inflation which pushes mortgage rates higher. So far this season, mortgage shoppers should be in good spirits.  Sales have fallen four weeks in a row and the outlook for a late-December rally […]

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