In Frank Sinatra’s famous tune “That’s Life”, he penned the lyrics: “That’s life, that’s what all the people say. You’re riding high in April, Shot down in May” I am going to change them to “You’re riding high at 4:36pm on Tuesday, Shot down at 3pm Thursday” Lame intro–I know–but my point is made. The market was all over the board last week.
In response to market volatility, mortgage lenders issued as many as 8 distinct rate sheets in a holiday-shortened, 4-day trading week. Lately, shopping for a low mortgage rate has been as much about timing as anything else.
There wasn’t much economic news to digest last week save for Friday’s Retail Sales data.
The numbers reflected what most of us already know — consumers are not spending as freely as in the past. And, because consumer spending accounts for 70 percent of the U.S. economy, retail restraint can mean the difference between a growing economy and a slowing one.
October marked the 5th straight month of declines for Retail Sales.
This week, markets will have their hands full with new data, 7 Fed speakers, and ongoing rescue effort discussions from Washington.
From a data perspective, the two most important data points are the Producer Price Index and the Consumer Price Index. Both measure the “cost of living” as it applies to businesses and consumers, respectively, and both can signal inflation when the readings are too high.
Falling energy prices will likely cause PPI and CPI to post negative readings, but if those negative numbers post higher than expected, mortgage rates should rise in response.
Regardless, mortgage rate shoppers should standby in Ready Mode. Changes to the mortgage market — like changes to the stock market — have been furious and swift, measurable in minutes, not hours. The only way to beat a market like this is to not play in it.
Once you find a rate-and-payment combination that suits your household budget, consider locking it in with your loan officer. The risk of not committing can be too great in a market moving as quickly as this one.
(Image courtesy: The New York Times)