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GDP Down; What Affects Rates

Rates are lower than ever right now, and we think it is unlikely that they will get any lower because banks simply cannot handle any more volume.

GDP numbers were released showing the US’ largest decline in output since 1982 – over 6% in the fourth quarter of 2008. The only good news is that New Home Sales were up 4.7% in February, but these numbers were driven by sharply lower prices, and slanted somewhat by January’s very low numbers.

We report general economic news from time to time because it often has a significant affect on interest rates. If and when we see repeated signs of strength in the economy (GDP growth, employment growth, purchase order growth, consumer spending increases, consumer confidence improvements, etc.), expect to see interest rates climb quickly.

The other factor that will send rates up in a hurry are indications of inflation, such as sharp increases in consumer and producer price indices. So far, there are no short term signs of inflation.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167