Last Week's Economic Retrospective.
Last Week, there were no surprises as the Fed decided to hold the Federal Funds Rate steady at 5.25%. But they did make a subtle change via the wording of their Policy Statement to suggest that a rate cut may be more likely than a hike at their next meeting. However, the Fed express concern that the Core inflation remains above their comfort level and will be unwilling to cut rates as long as this remains true.  Don't expect to see a Fed rate cut anytime soon unless the Core Personal Consumption Expenditure Index dips below 2% for a few consecutive months.

There was mixed news from the housing front.  Good news from the new construction Housing Starts report coming in slightly higher while new Building Permits report moved lower.  Existing Home Sales rose somewhat unexpectedly in February marking the largest monthly gain since March 2004 and the highest sales pace since April of 2006. This was pretty good considering the media is still talking about a housing bubble. This news was tempered by reports showing overall sales being off 3% from last year, the inventory of existing homes on the market rose slightly to a 6.7 month supply, and the median price of a home declined slightly to $212,800.  Many experts feel it is likely the housing market saw its worst days during August of last year, but although stabilizing, the housing market still has a ways to go.  Still, home loan rates ended up unchanged, just slightly higher than where they were at the beginning of the week.

This Week's Economic Forecast.
The economic calendar this week shows there will be reports being released every day, with New Home Sales on Monday, Consumer Confidence on Tuesday, Durable Goods Orders on Wednesday, Final 4th Quarter GDP on Thursday, and last but certainly not least, the Personal Consumption Expenditure Index on Friday. The Personal Consumption Expenditure Index happens to be the Fed's most favored measure of inflation, so investors, traders, and armchair analysts alike will be watching carefully and attempting to guess how the Fed will read the report, and what their next move might be.

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AJ Nisen
Thank you for your interest in starting a mortgage a conversation with me.  Remember, Bank of America has Industry leading low rates and is a full service bank. Bring me any mortgage offer to compete with to see what we can do for you.  I look forward to serving you in the future!

Alan "AJ" Nisen, MBA, Notary
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Danville Chamber of Commerce
Lafayette Rotary