Consumer sentiment drops at end of year

1/31/2014 3:53:50 PM

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According to Reuters, American sentiment about the economy declined in January, while spending rose in December. Economists at Reuters found that consumer spending rose 0.4 percent in December, after an increase of 0.6 percent in November. Americans have since changed their attitude about where the economy is headed, as consumer confidence has dropped, signaling that spending could weaken in the first quarter of 2014.

At the same time, The Wall Street Journal reported that mortgage volume hit its five-year low during the fourth quarter of 2013. From a year ago, mortgage rates have risen nearly 1 percent, and fewer Americans have applied for a mortgage refinance as a result. Refinance applications have taken over the majority of the mortgage market over the past few years due to record-low interest rates.

Mortgage rates recently declined following the Federal Reserve's January announcement that it would reduce stimulus spending by an additional $10 billion in February. The decline is good news for borrowers looking for a low cost mortgage in 2014.

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