San Diego, CA (PRWEB) August 11, 2013
LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. In a newly released article, Loan Love continues to show their interest in helping mortgage borrowers by helping them to understand 3 of the biggest indicators that affect mortgage interest rates today.
“Especially in recent years, it seems like the news is always full of stories about the economy and the indicators that help evaluate it. Although it may seem these news stories are intended to do little more than cause anxiety (or boredom), in fact, these indicators can give consumers a fairly good idea of whether interest rates are going to rise or fall – and that can be very valuable information to anyone interested in buying or refinancing a home,” the Loan Love article says, “If you’re trying to determine if now is the best time to lock in a rate, you might want to take a look at the following three indicators to get an idea of how interest rates are likely to move. These 3 things are solid predictors for when interest rates go up or down.”
The article then goes on to explains that these three predictors are:
- The GDP (Gross Domestic Product)
- CPI (Consumer Price Index)
- And Payroll Employment (PE)
The GDP, CPI and payroll indicators are coincident indicators, meaning they respond quickly to shifts in the economy. This is in contrast to the unemployment rate which lags behind the economy; shifts in unemployment do not have an immediate impact on the economy and their effect on inflation is delayed.
The GDP is report that is released each quarter that reflects the dollar amount of all goods and service sold by companies located in the United States during the previous quarter. Normally the economy grows by about 2.6% each year. A higher percentage of growth is a sign of inflation and this will cause mortgage interest rates to increase.
CPI, another of the primary indicators of inflation, is a report released each month. Analysts determine the Consumer Price Index by looking at thousands of products and taking note of how the prices of those products have shifted. If there is an overall increase, this is seen as and indicator of inflation, and this, as seen in the example above, will cause mortgage rates to increase. Conversely, a lower CPI can mean lower interest rates on the horizon.
Payroll employment, released on the first Friday of every month, is an indicator that offers data on overall employment, hours worked and earnings. Like the other two indicators, high monthly increases or an increasing trend are considered inflationary, and can cause interest rates to rise; lower numbers often indicate a drop in mortgage rates.
Understanding these three factors can help mortgage borrowers to foresee how rates will turn in the near future and this can be a very useful insight. The Loan Love article says: “Next time the news shifts to the economy, don’t let your eyes glaze over or your mind wander: Keeping an eye on these rates and understanding what they mean can help you decide whether to lock in a rate now or whether to hold tight, which can end up saving you lots of money in the long run.”
For more information, please visit LoanLove.com for the full mortgage rate prediction guide.