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By G. Steven Bray
Mortgage rates last week dropped to their lowest levels since early May of 2013. The question now is can we hold onto the gains.
Most of the recent rally can be attributed to the slow train wreck occurring in Europe, and that doesn’t appear likely to change soon. Chinese data this morning showed its economy continues to slow, and recent US data has been lackluster. All of this typically would support low rates.
One thing that could change this outlook would be an indication of improving US personal income. While the economy has been adding jobs, wages on average are stuck in neutral. Today’s personal income report showed slow growth. Friday brings the monthly jobs report. Should that report also indicate wage growth, rate markets may get a little nervous, and our rate rally could stall.
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