The economy has improved in the last six months, signaled by greater consumer spending, durable goods purchases and some signs of increased investment according to Federal Reserve Governor Daniel Tarullo which echoed the optimism of his boss, Chairman Ben Bernanke.
Tarullo stated “….has reinforced the sense that we are going to have slightly-above-trend growth going forward and that it is a firmer imbedded growth than may have been apparent six months ago.” As we have discussed several time, as the economy grows – so does demand for housing. So, this is great news that our recent trend of improving Existing Home Sales will receive a boost from economic growth just in time for a busy Spring buying season.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -31BPS from Monday’s open to Friday’s close which caused 30 year fixed rates to move higher. Don’t be confused by media reports about interest rates. They reported last week that rates decrease when in fact they increased. Why are they so wrong? Because the media simply reports the results of a Freddie Mac interest rate survey that is always at least a week old before it is published. Contact me for real information on rates.
MICHAEL MCDEVITT 