Last week saw mortgage rates holding fairly steady again. Economic news continues to be mixed, with no real strong indication either for or against future growth. Retail Sales did dip 0.2% in April, but removing autos from the calculation, sales actually rose 0.5°/0. Industrial Product sank more than expected. However, Housing Starts bounded up 8.0%, rather than declining as predicted. The best news of the week was that both the headline and core readings of the Consumer Price Index came in lower than expected. If inflation would moderate just slightly, and housing would pick up, we are likely to see mortgage rates move lower. However, the continued increase in oil prices has many analysts worried that inflation will grow throughout the economy, dragging GDP downward.
Mortgage rates may remain relatively flat again this week with a bit less data due. The biggest news of the week could be the Producer Price Index. If it comes in lower than expected, like the CPI last week, we could see the beginnings of some downward movement in mortgage rates.
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