Consumers held back on spending their hard-earned dollars in December as sales declined across all sectors in the retail space. Retail Sales fell 1.2% in December versus the +0.1% expected. It was the biggest decline in nine years. Lower prices at the gas pumps were a factor along with a plunge in the stock markets. After combing through the report, the 3.9% decline in Internet purchases is a big disappointment. The Retail Sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation.
Mortgage rates continued to decline in the latest survey the catalyst being low inflation coupled with slowing growth. Freddie Mac reports that the 30-year fixed-rate mortgage fell four basis points this week to 4.37% with an average 0.40 in points and fees, the lowest in 12 months. Freddie Mac said that while housing activity has clearly softened over the last nine months and the lingering effects of higher rates from last year are still being felt, lower mortgage rates and a strong job market should rekindle demand for the spring home buying season.
The Mortgage Bankers Association (MBA) reports that mortgage applications to purchase new homes rose in January though remain unchanged from a year ago. The MBA said that applications rose nearly 30% in January from December, seasonally adjusted. "After two lackluster months, new home sales surged almost 30 percent in January to the fastest pace since our survey began in 2013. The healthy job market, faster wage growth, moderating price gains and lower mortgage rates, all helped home sales recover." said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
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