![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged to slightly higher which put a little downward pressure on rates. Rates were volatile throughout the week. Positive movements occurred early in response to Treasury Secretary Yellen’s remarks that indicated, “I think we’ll see a substantial reduction in inflation in the year ahead.” Tame inflation readings also helped. Consumer prices rose 0.1% vs 0.3%. The core rose 0.2% vs 0.3%. The Fed raised rates 50 basis points as expected which resulted in large market swings. The rest of the data was mixed. Retail sales fell 0.6% vs the expected 0.1% decline. Weekly jobless claims were 211K vs 227K. Retail sales fell 0.6% vs the expected 0.1% decline. Mortgage interest rates finished the week unchanged to better by approximately 1/8 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Housing Starts | Tuesday, Dec. 20, 8:30 am, et |
1.415M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Existing Home Sales | Wednesday, Dec. 21, 10:00 am, et |
4.2M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| Q3 GDP | Thursday, Dec. 22, 8:30 am, et |
Up 2.9% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Dec. 22, 8:30 am, et |
225K | Important. An indication of employment. Higher claims may result in lower rates. |
| Durable Goods Orders | Friday, Dec. 23, 8:30 am, et |
Up 0.5% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, Dec. 23, 8:30 am, et |
Up 0.2%, Up 0.7% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| Capacity Utilization | Thursday, Dec. 15, 9:15 am, et |
79.8% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| PCE Core Inflation | Friday, Dec. 23, 8:30 am, et |
Up 0.3% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| New Home Sales | Friday, Dec. 23, 10:00 am, et |
600K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, Dec. 23, 10:00 am, et |
55 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Income & Outlays
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption. The report is closely watched as the consumer remains a vital component of the US economy. The release this week has the potential to move the financial markets. Now is a good time to take advantage of mortgage interest rates at their current levels to avoid market volatility.
