Dennis' Mortgage Blog

The Conference Board, a private research group, says you are less confident today about your economic future than you were in February.  If you do feel more confident then you are bucking the national trend as the Conference Board's monthly Consumer Confidence survey released today fell to 63.4 from 72.0 in February.  The 63.4 level matches the confidence level of American consumers in December 2010.

Why does consumer confidence matter?  The higher the consumer confidence in the economy and future financial conditions such as jobs, inflation, ability to save, the higher the economic activity of the consumer.  Conversely the lower the confidence of the consumer the lower the expected economic activity.

Yesterday we looked at the drop in consumer spending in February.  With consumer confidence dropping in March, and with food and energy prices continuing to climb, the expectation should be that in April we will learn that consumer spending dropped again this month.  

Confidence is an emotion, just like fear or excitement.  We often make decisions based on emotion--while not always well founded, often these decisions are well grounded.  If you are concerned about your job, or the jobs in your community where you have your business, chances are you will have some confidence issues regarding your personal financial situation.  Feeling a lack of confidence you will analyze your personal expenditures and budget and most likely eliminate or scale back nonessential spending.

Multiply your confidence, or lack thereof, by a couple of hundred million and you begin to see the impact consumer confidence has on our economy and any sustained and vibrant economic recovery.

Despite the dismal news stocks continue to climb and mortgage backed securities continue to leak lower from recent highs on March 16th (remember low prices for mortgage bonds means higher rates).

Only if you are extremely risk averse, or a soothsayer who knows something, should your float your interest rate in this market. 

Mortgage rates continue to remain low for the time being.  Call or email Dennis today to determine your purchasing power for a new home loan or monthly savings from a refinance.  Direct dial 562-472-1118