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Consumer Sentiment climbed more than forecast in May as Americans turned more hopeful that employment gains will be sustained, helping them cope with higher fuel and food costs.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 72.4, a three-month high, from a final reading of 69.8 in April, the group reported today.
This is another positive for the housing market.  As consumers feel more confident about the economy, they are more likely to pull the trigger on that next home.

What Happened to Rates Last Week:
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Mortgage backed securities (MBS) lost -25 basis points last week which helped to push 30 year fixed rates higher.  Mortgage rates were still very low but moved up from the best levels of 2011 which occurred two Friday’s ago.

Mortgage rates felt pressure from economic data that showed some inflationary pressure (which mortgage backed securities do not like). We saw increases in the Producer Price Index, Retail Sales, and Consumer Sentiment.  We also had a much weaker than expected 30 year Treasury bond auction that put pressure on rates.

What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week.  They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  I will be watching these reports closely for you and let you know if there are any big surprises:

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It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

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Vince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
vince@coloradomortgageguy.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com

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