Your Feelings Could Impact Home Loan Rates

We all ask friends, family, and even perfect strangers the standard question:
“How are you?” And most of us reply with a polite, “Fine, thank you,” as we
think people may not really want to know how we are doing or what we are
feeling. But the truth is, our feelings matter…and they may have a greater
impact on our economy–and ultimately our mortgage–than you

Consider this: How are you really feeling about some of the
things that are a major part of our lives? How do you feel about your own job?
Your bank accounts? Your mortgage? The country’s economy? Your financial

There are actually two different reports each month that tap into
these particular feelings of ours: the Consumer Confidence Report, and the
University of Michigan Consumer Sentiment Report. What’s the

The Consumer Confidence Report data is collected by a
non-profit organization which surveys 5,000 different households and asks if the
survey participants feel positive, negative, or neutral about the following

  • Current business conditions
  • Business conditions for the next six months
  • Current employment conditions
  • Employment conditions for the next six months
  • Total family income for the next six months

The report is benchmarked with the year 1985 as being 100, the year chosen
due to it being a year of consumers feeling “balanced,” neither overly
optimistic nor pessimistic.

The Consumer Sentiment Report is
slightly different. It uses the year 1964 as its benchmark year with a value of
100. The Consumer Sentiment Report was developed by a professor at the
University of Michigan, and still continues on today with the same format,
surveying only 500 households, but going much deeper. The Consumer Sentiment
survey asks a total of 50 questions, centered around these topics:

  • Personal financial situation now and a year ago
  • Personal financial situation one year from now
  • Overall financial condition for businesses over the next twelve months
  • Overall financial condition for businesses over the next five years
  • Current attitude toward buying major household items

While the reports are different, they are widely relied on by business owners
and corporations all over the world. Why? Because when we feel good about the
economy, secure in our jobs, and satisfied with our own finances, then we are
more likely to buy items for our homes and businesses. If we are feeling
insecure and doubtful about our own personal financial situation, then we are
far less likely to spend or invest.

Business owners large and small make
decisions on this data, and their decisions ultimately impact other economic
reports like the Retails Sales Report and the Jobs Report. When our economy is
struggling and these reports are less favorable, our Bond Market usually
benefits as investors seek a safe haven for their money. And since home loan
rates are tied to Mortgage Bonds, our home loan rates are sometimes at their
best when our economy is struggling. In a way it makes sense…in times of
economic struggle, good home loan rates can help kick start our economy in other


About Best Florida Mortgage Company! Jim Marcinkowski

Mission Statement Our mission is to be the home financing partner that you trust to serve your family, friends and community. Through our family of dedicated mortgage professionals, our commitment is to deliver an exceptional experience. Our unwavering dedication to integrity, honesty and ethics is the foundation of all of our relationships. NMLS 182565, NMLS 1016
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s