Monday, July 28, 2014

Hurry, inflation will usher in higher mortgage rates!

Economic data ramps up this week and ends with the "Big Enchilada" on Friday, August 1st, with the July Jobs Report.
In the first half of this year, there has been an average of 230,000 new jobs created per month, above the 203,000 recorded per month in the first half of 2013.

Can these numbers be sustained and perhaps even move higher in the second half of the year?
If the numbers remain constant or increase, we could see inflationary worries, the arch enemy of bond prices.  As bond prices suffer (go down) because of inflation, or inflationary worries, rates will go in the opposite direction (go up).  
Today's additional headline was, "Worker's raises are back in vogue", raises additional worries that products will cost more at the wholesale level.  The monthly wholesale inflation report can be a market mover, but so far has been tamed by the unsettled world military climate overseas.  
As the summer draws to a close, it may be the perfect time to consider purchasing a first home, selling and upgrading or downsizing or looking at the 2nd home or investment home market.  

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