Report for Retail Sales Should Spell Higher Mortgage Rates For Wednesday

Georgia consumers  are  spending. And appears this maybe -- unwelcome news for today's home buyers.
Wednesday, the Census Bureau will release its March Retail Sales figures and the report is expected to show higher sales receipts for the 9th straight month. A strong reading like that should spell higher mortgage rates in Atlanta, Georgia and nationwide.
The connection between Retail Sales and mortgage rates is fairly tight. Retail Sales are "consumer spending" and consumer spending accounts for the majority of the U.S. economy. The U.S. economy, of course, is a dominant force in setting the direction in which mortgage rates are headed.
For example, in 2010, it was a weak economy and murky outlook that helped drive mortgage rates to all-time lows. Since last year, however, the jobs market has started its recovery, monthly receipts have returned to all-time highs, and the Federal Reserve is revising growth estimates for 2011.
Not surprisingly, mortgage rates have reversed, too.
As compared to 6 months ago, conforming rates are higher by 0.750%. Home affordability across Georgia is taking a hit. Plus, the stronger the economy appears to be, the more likely for mortgage rates to climb more.
It's why tomorrow's Retail Sales report is so important.
If you're under contract for a home in Georgia , or even evaluating the merits of a refinance, there's a lot of risk in "floating" your mortgage rate. The more prudent plan is to find a rate at which you're comfortable with the payment, and lock it in.
And you may want to take that lock sooner in Georgia than you had planned -- if only to protect your monthly payments. Once tomorrow's Retail Sales report hits, it may be too late. Especially if receipts rise for the 10th straight month.
The Retail Sales report is due for release at 8:30 AM ET.

Mortgage programs getting more friendly?

Is Mortgage Underwriting Getting More Friendly?

It looks like banks are less scared of mortgage loans these days.

In its quarterly survey to member banks, the Federal Reserve asked senior bank loan officers whether "prime" residential mortgage guidelines had tightened in the last 3 months.

Just one-fifth of banks said guidelines tightened last quarter, a dramatically lower figure versus last quarter -- a signal that mortgage underwriting may get less restrictive in the months ahead.

It is worth noting, however, that not a single responding bank said its guidelines had eased. For now, getting through underwriting is still much tougher than it was 2 years ago.

Some of the changes today's borrowers face include:

• Higher minimum FICOs
• Larger required downpayments and equity ownership
• Higher income levels versus monthly debts
• Larger reserve requirements

Furthermore, second mortgages are scarce when loan-to-values exceed 80 percent.

The underwriting changes of the last 24 months preclude many Americans from getting access to today's low rates if the Fed's reported trend continues, that could reverse before the end of the year.

Some analysts claim that credit tightening started the U.S. recession. Credit loosening, therefore, could help end it