The retails sales numbers released are another report supporting the idea that the U.S. economy is recovering. Yesterday the Census Bureau showed that retail receipts rose for the 10th straight month and, at $321 billion, reached an all-time high.

The reason why this report is so important is that retail sales make up about a third of the economy as a whole. If the economy is healthy or begins to recover you will also see the mortgage interest rates begin to rise again.

If consumer spending is healthy you will also see employment rise to keep up with the demand of the consumers. It might be a scary concern to know that unemployment is higher then expected and quite high in general and job growth is slow yet we are at an all time high for retail sales.

If the interest rates start to rise it will make a significant impact on home affordability which is extremely good currently. Higher interest rates may also be combined with higher home prices which will make it much more difficult for first time homeowners or those that are recovering from unemployment.

If interest rates begin to rise keep in mind that for every $100,000 borrowed you will pay an additional $64 per month more in your mortgage payment. It’s a difficult balance and a lot of information to keep track of. If you have any questions or concerns about your specific scenario know that a consultation with a loan officer is free.

Yesterday the Federal Open Market Committee (FOMC) ended it’s third meeting of the year and had an immediate release where they kept the Fed Funds Rate unchanged. The vote among the FOMC was unanimous at 10 – 0 to keep the rate unchanged.

There was notes mentioned in the brief press release, the FOMC noted that the economy is recovering at a moderate pace with labor markets also improving and household spending continues to improve but the housing sector continues to be “depressed”. What does all of this language mean? Simply contact your loan officer and have them explain the trends and volatility in the interest rates right now so you can make an informed decision regarding your interest rate.

The FOMC mentions inflation and also notes that it’s expected. Additionally the FOMC will keep it’s $600 billion bond market support package (QE2). The language in the notes from the meeting that were released seem to suggest that there maybe another support package created at the end of the 2nd quarter this year if they think the economy still needs additional support.

The new information didn’t cause a change in interest rates like many anticipated it would depending on the language. Interest rates continue to remain volatile and anyone looking to purchase or refinance a home this year would benefit from visiting with a loan officer to make an informed decision.

Federal Open Market Committee (FOMC) started the third meeting of the year today. The Fed will meet eight times a year and today they start a two-day meeting.

The FOMC is comprised of a 12 person committee within the Federal Reserve. The group is led by the Fed Chairman who is currently Ben Bernanke and they impact the nation’s monetary policy greatly. Often times the average consumer will confuse the Fed Funds Rate for what they think the mortgage interest rates should be. The two rates are very different and there is no direct relationship between the two rates.

The difference today between the Fed Funds Rate and the average standard, 30-year fixed rate mortgage is 4.625 percent. This difference continues to increase and decrease on a daily basis. Expect to see some change when the FOMC meeting ends and they release the public statement from the meeting tomorrow.

Everyone on Wall Street is expecting the FOMC to continue to keep the Fed Funds Rate at it’s current target range of 0 – .25 percent which it has been at since December of 2008. The number is not always as important since it doesn’t move too quickly. Often times the wording used surrounding the rate will have great impact on what interest rates do.

The language may include information talking more of inflation and economic growth which will be bad for interest rates but on the flip side if they withdraw the existing $600 billion bond market stimulus you will see rates fall.

Often times the hard part of buying a home is simply making adjustments according to the interest rates since they are so volatile. The rates greatly impact your purchasing power and monthly budget. If you have any questions you should reach out to your loan officer and make sure you are informed to make the best decisions going forward.

Last week was a positive week for mortgage interest rates this past week. Positive housing data started the week out worse but by the end of the holiday-shortened week the rates had fallen and improved. With the holiday the markets were closed on Thursday afternoon and all day Friday. Speak with your loan officer if you missed out on the data that was recently released this past week.

Last week the Standard & Poor’s issued a downgrade on U.S. debt. This move would typically end up with investors moving away from mortgage-backed bonds although for some reason this time it did the exact opposite.

Some are saying the reason for the opposite reaction is in effort to force Congress to address a rising debt-load; while others are saying the move alone should slow down inflation. What does this all mean……simply, keep in mind that both ideas are positive for mortgage interest rates and hopefully they will continue to fall.

There is a lot of information coming out this week including New Home Sales, Pending Home Sales and Consumer Confidence data and most importantly the Federal Open Market Committee is meeting for the month and this time it will be a bit different.

Usually after the FOMC meeting the press release is shared and that is all. This time they will release the press release a few hours earlier and allow time for Fed Chairman Ben Bernanke to hold a press briefing at 2:15 PM ET.

This week will be quite exciting and volatile for mortgage interest rates with all of the data and especially the Fed Meeting. If you’re floating or watching interest rates it should be fairly calm today and tomorrow and look for some activity here before the end of the week. If you have any questions simply contact your loan officer for a free and no obligation consultation.

Consumer spending is happening and continuing to grow, which spells bad news for rate watchers. If you’re planning to purchase or refinance your loan and you’ve been watching interest rates you should expect them to continue to rise through the end of the year.

Tomorrow you will see the March Retail Sales report and it’s expected to show improvement for the 9th straight month. If that is the case you should expect to see it to increase interest rates. The Retail Sales and mortgage interest rates are closely tied together. Consumer spending is a very strong variable in determining where mortgage rates are going.

Last year we saw a very weak economy and it kept interest rates low much longer then experts expected. When the economy turns around and improves you will see the interest rates continue to follow closely. With some job growth in addition you are seeing improved spending and the Feds are also revising growth estimates for 2011.

If you are planning to purchase a home or refinance your mortgage this year you may want to stop watching and start acting so that you can take advantage of the rates before they continue to rise and impact your personal budget. If you are floating your interest rate you may want to contact your loan officer today and lock that rate.