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Wednesday
Feb222017

Economy shows signs of inflation picking up

Mortgage rates hold steady  - The Freddie Mac Primary Mortgage Survey released on February 16, 2017 reported that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 4.15%. The 15-year fixed average rate was 3.35%.  The 5/1 ARM average rate was 3.18%.

Economy shows signs of inflation picking up - The prices Americans pay for goods and services surged in January by the largest amount in four years, mostly reflecting a rebound in the cost of gasoline that’s taking a bigger chunk out of household incomes. The government's reported consumer price index (CPI) showed that  consumer prices rose 2.5 percent in January from a year earlier, the highest rate since March 2012. About 1/2 of the rise was attributed to higher gas prices. Rent and medical costs also saw a spike from a year earlier. The seasonally adjusted 0.6% rise in January was double the 0.3% economists predicted.  Core inflation which strips out gasoline and food prices rose 0.3% in January and was up 2.3% from last January.  We watch inflation because when inflation rises it causes interest rates to rise. Fortunately rates have risen on the expectation of higher inflation, so rates remained steady despite the higher CPI report.

California home closed escrows higher in January - The California Association of Realtors reported that home sales totaled 420,100 in January on a seasonally adjusted basis. The number of sales increased 2.1% from December's sales pace and 4.4% from last January. Although the median price dropped slightly from December it was up 4.8% from January 2016's median. Inventory levels rose to a 3.7 month supply in January from a 2.7 month supply in December as more homeowners put their homes on the market. There was a 4.3 month supply last January.

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