The Veridian Blog

We have mixed results today in spite of the enormous potential from two highly influential reports today.  First, it was Retail Sales that rose 1.6% last month, much higher than what experts thought.  This means that consumers spent more last month than expected which is generally bad news for bonds and mortgage rates, especially since consumer spending makes up two-thirds of the US economy.  On the other hand, last month's Consumer Price Index came in slightly lower than most had forecasted.  The core reading showed no change when most were expecting a 0.1% increase.  This basically means that inflationary pressures were softer than expected at the consumer level of the economy.  Inflation is an ever present threat to low mortgage rates so whenever it is held in check, that is good news for borrowers.

Interest rates remain at or near all-time lows.  Gradually, wholesale lenders are releasing more products into the market, including the long-awaited Jumbo variety (for loans over $729,750 in the Bay Area), as well as very competitively priced 10/1 and 7/1 ARM loans.  We feel that in time, underwriting guidelines will begin to loosen as well after a period of cautious skepticism. 

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