Dennis' Mortgage Blog

The Commerce Department reported today that retail sales in March increased only 0.4% from February.  The report is a little disappointing as many expected hotter sales in March after February's retail sales saw a 1.1% increase from January.  With Easter falling late in April the expectations, hopes?, are for a rebound to over 1% growth in sales this month.

While any increase is better than a decrease, the slow down from February could portend a slow down in consumer shopping.  March was the ninth straight month retail sales increased over the prior month, however the increase was the lowest increase in the nine month period.  Is it a blip and sales will pick up? Or is it the beginning of another slow down?

I do not feel the March slow down was coincidental to the spike in gasoline prices that started in March.  The past few years have shown consumes to be much more careful with their spending.  Impulse buying is down considerably and consumers are taking longer to decide whether to make bigger ticket item purchases.  Calculating costs for commuting and driving the kids to school, ballet rehearsal, soccer practice and the mall also has an impact on the decisions.

Consumer spending makes up approximately 70% of our economy.  Consumer spending slows down and so does an economy currently growing at a snail's pace.  Slower growth in retail sales raises some eyebrows and creates some angst regarding the spring and summer economies.

Between the retail sales number and President Obama's speech on his budget plans, which was long on speech and short on plans, the stock markets shrugged and bonds went up.  A good day for mortgage rates ahead of producer price index and consumer price index numbers later in the week.

As usual for me, my advice is to not float your mortgage rate at this time.  If you are able to lock through your escrow period you should lock it in and take away any risk.

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