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.