March 15th, 2014 1:26 PM by Todd Perdew
Investors continue to move away from stocks and into bonds as a result of the continuing flare up between Russia and Ukraine. Economic data coming out of China also shows the push towards bonds. The U.S. Retail Sales report was a mix of good and bad news; January figures were revised lower and February came in stronger than expected. Weather is still playing a factor and distorting the figures some but overall had little impact on mortgage rates which ended up lower than the previous week.
There's been talk of a proposal from the U.S. Senate to replace FannieMae and FreddieMac whom are the largest puchasers and insurers of fixed rate mortgages. Supposedly, a new government entity will take over many of the primary functions while some of the risk will be passed on to private insurers. Republicans and Democrats alike are in support of reducing the risk to taxpayers but cannot yet agree on what the government's role should be in the housing market. This is an ongoing debate. They're still trying to figure out whether private investors will be allowed to participate in the profits of Fannie and Freddie. The two entities have been showing signs of recovery and Fannie is once again showing profit. It's expected that debates will continue for some time, could be years before we eventually see a new government entity that rolls out to take the place of the two mortgage giants.
This coming week brings a vote in the Crimean region of Ukraine which if they vote to secede from Ukraine could escalate the tensions between U.S. and Russia. Also, a Fed meeting is near which investors are predicting another cut to the bond purchase program. More reports are coming this week and include The Industrial Production Report, Core Inflation Consumer Price Index, Housing Statistics,
Existing Home Sales Report, and Philly Fed.