It’s impossible for anyone to know for sure what the Florida mortgage rate and home affordability landscape will look like next year, but today’s Retail Sales data may provide a glimpse of what is to come.
Compared to this pas October 2009, November’s ex-auto sales (sales totals that subtract motor vehicles and parts) were up by more than 1 percent. This increase was anticipated by Wall Street, but not to this degree.
Home values are increasing in a good number of regions across the US, and household net worth totals are rising as well. As such, we may be able to infer from the Retail Sales report that consumers are beginning to feel a little more confident about their financial situations, and about the economy in general.
To homebuyers and rate shoppers, strong Retail Sales data may foreshadow higher mortgages ahead. This is because sales data is a by-product of consumer spending and consumer spending accounts for more than two-thirds of the economy.
As spending increases, the economy tends to grow a bit, giving Wall Street investors more confidence in the ability to make money on stocks and pull money out of “seemingly safer” bond markets — including mortgage-backed bonds, the basis for conforming mortgage rates.
As we’ve stated here before, any decrease in bond demand leads to higher Florida mortgage rates and, as a result, lower levels of home affordability.
Though we may see a continuation of this Holiday Season momentum moving through the end of 2009, it will likely mark just the second time that Retail Sales data fell year-over-year since the government started tracking it 40 years ago. The other year was 2008.
However, if the November’s Retail Sales report provides any indication of consumer sentiment overall, we should expect 2010 to rebound strongly. And when it does, mortgage rates should suffer.
The housing market is recovering slowly, Florida mortgage rates are still near all-time lows, and the government is offering an $8,000 tax credit to qualified buyers through April 30, 2010.
If you plan to buy a Florida home next spring, you may want to consider moving up your timeframe. Waiting may be costly.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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- Florida Mortgage Update – Week of December 14, 2009 Florida Mortgage markets took a hit for the second week...
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