With many traders on vacation this week, the impact of economic reports on mortgage rates will be amplified.
Specifically, be wary of this week’s New Home Sales and Existing Homes Sales reports. Since July, the Fed has repeatedly told us that housing will lead to an economic slowdown. As a result, markets have placed housing under a microscope and this week features two key housing releases.
Why is housing considered a major driver of the economy? Think about the last time you bought a house, or otherwise moved. What sort of purchases did you make that were a direct result of the move?
- Stereo system?
- Moving supplies?
How many trips to Home Depot or Lowe’s did you make?
Each trip to a new store is more money pumped into the economy. If people aren't moving, then they’re not spending.