For the fourth straight month, the Rasmussen Reports Consumer Spending Update shows confidence in the economy trending upward - with an amazing 25-point overall increase in economic confidence and a 26-point increase in confidence in the direction of the economy since the 2016 presidential elections.
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What does this mean for interest rates? Are they REALLY on the way up like everyone is talking about?
Because the economic cycle predicts what will happen with interest rates relative to growth of wages, consumer confidence, Wholesale price escalation, etc., we have data which supports what will be happening in the future of the mortgage industry in 2017.
Okay, so what is going to happen?
As consumer confidence increases, our economy is expanding and workers (consumers) will buy more products, increasing demand which at a certain point, creates inflationary pressure (From our old days in Econ 101-Demand and Supply lecture).
Mortgage bonds HATE inflation! So, If bond prices go down, because they don't like inflation, rates go up. Really, from my vantage point and from what I read from experts that are a whole lot smarter than I am, it's just a matter of time before the rates go up.
Then you might be wondering by how much will the rates be increasing? That's for another post.
But for now? Our rates continue to hover at historic lows. Great news for purchasing, building and refinancing.
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