Mortgage rates remained at record lows in the latest survey but inched higher last week. The MBA reports that the 30-year fixed-rate mortgage rose two basis points to 2.98% with 0.37 in points for the week ended February 12, 2021. The Market Composite Index, a measure of total mortgage loan application volume, declined 5.1%, the Purchase Index fell by 6%, while the Refinance Index decreased by 5%. Spokesperson Joel Kan said, "The housing market in early 2021 continues to be constrained by low inventory and higher prices."
In economic news, wholesale inflation or the Producer Price Index (PPI) showed an increase of 1.3% versus an expected gain of 0.5%. The Core rate, which strips out volatile food and energy, was well above expectations at 1.2% in January. Also, January Retail Sales surged by 5.3%, five 5 times the 0.8% expected as some pent-up demand and stimulus checks fueled the big gains. Consumer spending makes up two-thirds of the U.S. economy.
Prices at the pumps continued to push higher in the latest survey fueled by gushing oil prices. The severe cold and snow in Texas has decreased production and has pushed West Texas Intermediate(WTI) oil to $60/barrel, the highest since January 2020. The national average price for a regular gallon of gasoline is at $2.53, up from $2.38 a month ago. A year ago the price was $2.43 while the record high price was on July 17, 2008 at $4.11. The price for WTI went negtive for the first time ever in April 2020, meaning you would have to pay someone to take a barrel of oil from you. “Crude, not demand, has been the main factor driving gas price increases this year,” said Jeanette Casselano McGee, AAA spokesperson.