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Today’s Economic Data:
So third quarter GDP was revised upward to 5.0%, well above the 4.3% consensus. This is the fastest growth since 2003. We may see GDP estimates dip a bit in the coming quarters as a result of the drop in oil prices. Still, this is an unexpectedly strong report, and another sign that the economy is picking up steam heading into 2015.
On the other hand, Durable goods orders contracted by -0.7% from October to Novemeber, compared to expectations of a 3.1% increase. Durable goods orders excluding transportation orders were down -0.4%, compared to expectations of a 1.3% increase.
How does This Impact Mortgage Rates?:
Well, in the short term, mortgage rates are under upward pressure. In the longer term, if we continue to see growth like this, a mid-2015 rate hike from the Fed looks increasingly likely. Tim Duy had a really good post yesterday about the last cycle of rate hikes, and how they were communicated and executed. It’s good reading.
Of course everything is data dependent, but everything is lining up for a rate hike in the middle of 2015. If you’re looking for a new mortgage, this is something of which you need to be aware.
This Week’s Significant Economic Data:
Monday:
- Existing Home Sales: Expected: 5.20M, actual, 4.93M.
- Durable Good Orders: Expected: 3.1%, actual: -0.7%.
- GDP: Expected: +4.3%, actual. +5.0%
- Personal Income and Outlays:
- Weekly Jobless Claims
- Markets Closed for Christmas
- No significant data.
