Releases Mortgage Rates Update - Interest Rates Fall Despite Signs of Recovery

Share Article releases updated weekly analysis of mortgage rates at the start of 2012 which finds that interest rates have hit a new record low. Analysis also includes a forecast of likely rate changes based on events within the last week.

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With the EuroZone still in economic uncertainty, and the U.S. posting strong annual sales figures investors will continue to see the later as the safer bet.

The weekly mortgage rate report finds that last week was a good week for mortgage interest rates and the trend is likely to continue. Despite encouraging signs that the U.S. economy is on its way to recovery, rates started the week out 3 basis points lower. This is due to investor interest in U.S. Treasuries and bonds which are still considered a safer bet compared to European investments.

Current interest rates are:

         4.18% - average rate for a 30-year fixed rate mortgage
         3.38% - average rate for a 15-year fixed rate mortgage

All in all the economy was looking up last week - the December Employment Report showed a drop in unemployment to 8.5% and the Commerce Department noted that factory orders increased by 1.8% in November. However, the recovery has been slow and the real estate industry is still trying to find its footing.

This week two reports in connection with consumer spending will likely have an effect on interest rates come Monday. The Retail Sales Report, which tracks monthly sales of U.S. retailers, measures consumer spending which accounts for approximately 70% of the U.S. economy. The December report found that while spending wasn't high initially expected there was a .1% gain after seasonal adjustments. While that wasn't a huge gain it did add to the overall 2011 sales numbers which showed an 8% increase over last year making it the largest annual percentage increase in 12 years.

Friday the University of Michigan will release its Index of Consumer Sentiment. The report will indicate consumer's willingness to spend which has a significant impact on the markets. If the report shows any dramatic changes over the last it will likely cause slight movement in mortgage rates. is forecasting that with the EuroZone still in economic uncertainty, and the U.S. posting strong annual sales figures investors will continue to see the later as the safer bet. Given the December sales report, the Friday sentiment report will likely show a slight increase in consumer confidence and willingness to spend. All of which indicates there won't be much movement in mortgage interest rates next week.

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