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via: TheMortgageReports.com/Dan Green
Mortgage rates have moved higher 0.250% this week. If you've been shopping for low mortgage rates on a HARP 2.0 refinance or FHA Streamline Refinance, you've no doubt discovered this the hard way.
The reason why mortgage rates are rising is because of Wall Street's not-so-sudden realization that the U.S. economy may be actually improving.
Mortgage Rates Climbing Quickly
Retail Sales measures total cash receipts for merchandise bought from a brick-and-mortar store, or online. It's a measure of consumer spending, which is believed to comprise roughly 70 percent of the U.S. economy.
In other words, as Retail Sales figures grow, so does the U.S. economy -- an unfortunate consequence for today's mortgage rate shoppers.
Se,, as reported by the Census Bureau, U.S. Retail Sales rose to $335 billion in February, excluding cars and auto parts. The figure marks another all-time high for Retail Sales. It's the 19th time in 20 months that sales receipts climbed.
Furthermore, 11 of 13 retail sectors posted gains in February, suggesting that consumer spending is increasing broadly, and not just in a few remote areas of the economy.
Since the Retail Sales report's release, mortgage rates have zoomed higher.
Of course, everything is relative. FHA mortgage rates and HARP mortgage rates are still cheap. They're just not as cheap as they were in February.
No QE3 From The Fed? Higher Rates Ahead.
It was a poor economy brought mortgage rates down. A strengthening one, therefore, will bring mortgage rates up.
Right now, the economy is strengthening.
Not only has consumer spending reached record levels (again), but the jobs market appears to be in bloom. More than 1 million jobs have been created in just the last 5 five months. There remains a net job deficit from 2008, but every month is a step in the right direction.
In addition, manufacturing is rising, business investment is rising, and consumer confidence is rising. All of these items taken separately could be enough to raise mortgage rates. Taken together, they're a force. And then, we consider the Federal Reserve's most recent remarks.
In summary, the Fed sees growth coming faster than originally expected. There's suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low (i.e. QE3).
Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out.
With no stimulus, mortgage rates rise.
You Can't Predict A Bottom. Lock Your Rate Now.
Mortgage rates change all day, every day. You can't know when rates will rise and you can't know when they'll fall -- especially because they're subject to outside influence from the U.S. government.
Related, you can't know when mortgage rates have reached a bottom. You can only know in hindsight. Right now, though, it appears as if mortgage rates have much reason to rise and little reason to fall. All economic signs point to growth and growth takes rates north.
Best thing you can do in your search for low mortgage rates and a great deal is to get mortgage rates quote, and see how they stack up. You're under no obligation when you shop for mortgage rates so make the best of your time.
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