Rate Update December 15, 2010
Mortgage rates are worse today.
Fixed mortgage rates have now increased by 1.00% in the past 6 weeks on increased optimism about the economic recovery. Positive news continued to roll in today to help support this position.
This morning’s Consumer Price Index report showed that inflationary pressure at the retail level of our economy remains in check increasing by only .1% in November. The fact that prices rose by .1% for consumers but .8% for producers (according to yesterday’s PPI index) last month is a sign that business’ profit margins are currently wide enough to absorb the higher costs. If and when these cost increases are passed to consumers we are likely to see interest rates move even higher.
Industrial Production & Capacity Utilization also came in better than expected this morning.
With yields significantly higher than they were only 6 weeks ago I continue to believe that we’ll see a trend reversal and rates will temporarily move lower. However, this has yet to play out.
Current outlook: short-term float, long-term lock
Posted: December 15th, 2010 under Rate Update.
Tags: dec 15 2010 mortgage rates