The United States economy appears to be trending in the right direction according to Academy Mortgage. Their data has shown that after three months of declines, retail sales have gone up in the month of March as the increase was fueled by auto sales and big-ticket household purchases.

Likewise, the labor market continues to show strength as the unemployment rate of 4.1 percent is nearing the Federal goal of 3.8 percent. There are increasing expectations that inflation will continue to rise this year however, and higher inflation contributes to higher mortgage rates.

So how does this translate to the housing market? With buyer demand for new housing still at a strong level, total mortgage applications were up 4.9 percent last week, and purchase applications were up 10 percent from over a year ago. It appears the time to buy is now before inflation and mortgage rates rise.