This week is filled with economic data. Tuesday brings us consumer confidence, which economists are expecting to increase after last month’s weak report. New home sales data will be out on Wednesday. With the housing market stabilizing sales are estimated to be at 380,000 annually. Jobless claims are out on Thursday and lastly on Friday we have consumer spending, personal income, and consumer sentiment. Economists are expecting spending to stagnate with the struggling job market as well as the high gas prices.
The fiscal cliff that the U.S. economy is facing at the end of the year may be put off for another year as Congress needs more time to decide what is best way to reduce our debt. The fiscal cliff is important to us because once this happens there will be $109 billion worth of spending cuts which would likely send the U.S. back into a recession. Economists believe that the uncertainty over the fiscal cliff and what Congress plans to do is holding back the economy.
On an optimistic note mortgage rates have gone back to record lows as QE3 is having a positive effect on rates so far. Last week mortgage rates for a 30 year fixed fell to 3.49%. The average 15 year fixed went further than the record low last week, dropping to 2.77%. Affordable mortgage rates are helping fuel the housing recovery which was the Fed’s goal to help stimulate the economy with QE3.
Senior Loan Officer
1st Advantage Mortgage, a Draper and Kramer company