NATIONAL Housing Market Update: Retail Sales Improve
The U. S Bureau of
U.S. retail sales in July posted their biggest gain since March, tempering fears that the world's largest economy might be slipping back into recession.
Sales climbed 0.5 percent, in line with analyst forecasts and following an upwardly revised 0.3 percent gain in June.
Consumer spending accounts for two thirds of U.S. economic activity, and the Commerce Department data released on Friday indicates the third quarter was off to a decent start.
Excluding autos, sales increased 0.5 percent, well above forecasts for a 0.2 percent gain. The figures were bolstered by a 1.6 percent jump in gasoline station sales, in part reflecting the higher cost of fuel.
Consumer spending is vital to the housing market. Any improvement in consumer behavior and their willingness to make purchases is welcome news to the housing industry as it often translates into more demand for housing.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +168 basis points last week which helped to move mortgage rates lower from last Friday to the prior Friday. We closed at our best levels of 2011. The gains were primarily due to very strong demand for our 10 year Treasury auction and the much weaker than expected economic news as well as continued concern over weakness in Europe.
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