If consumer spending is a keystone element in the U.S. economic recovery, a full-on rebound is likely underway.

Tuesday, the Census Bureau released its national January Retail Sales figures and, for the seventh straight month, the data surpassed expectations. Last month's retail figures climbed 0.3 percent as total sales receipts reached an all-time high.

It's good news for the economy which is scratching back after a prolonged recession, but could push mortgage rates higher.

Because consumer spending accounts for the majority of the U.S. economy, Retail Sales growth means more economic growth and that draws Wall Street's dollars toward riskier investments, including equities, at the expense of safer investments such as mortgage-backed bonds.

On the heels of the Retail Sales report's release, bond prices are falling this morning. As a consequence, mortgage rates are rising. It's the same pattern we've seen since mid-November -- "good news" about the economy sparks a stock market frenzy, casuing mortgage bonds to rise.

A sampling of other recent good-for-the-economy stories include:

• Corporate earnings are rising quickly (Marketwatch)
• Existing Home Sales up 12% month-over-month (CNN Money)
• The Fed says the economy looks "brighter" (Bloomberg)

While we hate to see rates rise, a stronger economy is better for everyone.  We must remember that at the peak of the Real Estate Boom, mortgage rates were as high as 6.80%! 

However, if you are in the market to buy but have been waiting for prices to bottom out, you may want to move on it now.  The increase in rates will cost you more in payments than the sales price.  And if you have been thinking of refinancing but think you may have missed the opportunity, think again!  Rates are still very low and the opportunity to save may still be available for you.

Please call or email me today to talk about your situation to buy or refinance today.