Mortgage rates near record low

A 30-year fixed-rate mortgage dipped to an average of 4.93 percent in the week ending Feb. 18, down from 4.97 percent last week. This week’s long-term mortgage rates were the lowest since the 4.71 percent average in December. That was the lowest level since at least 1971, when Freddie Mac started tracking rates. “Mortgage rates eased for the second week, while economic-data releases suggest that the housing market may be in a slow state of recovery, says Frank Nothaft, chief economist at Freddie Mac (NYSE:FRE). Separately, the National Association of Realtors reported existing-home sales rose in 48 states and Washington, D.C., between the third and fourth quarters. Annual price changes in the fourth quarter rose in 67 of the nation’s biggest metropolitan areas. In the Charlotte market, the number of homes sold increased 8.3 percent to 1,363 in January from a year earlier, according to the Charlotte Regional Realtor Association. [Read the full article]

{loadposition in-article}

The February 2010 Economic Outlook by Fannie Mae’s Economics & Mortgage Market Analysis Group notes economic growth continues at a moderate pace. It cites the continued rise from record lows in the length of the average workweek and a drop in the number of part-time workers, which it calls the most comprehensive measure of unemployment and a good measure of labor market slack.The upswing in employment data means positive news for economic growth, said Fannie Mae chief economist Doug Duncan in the report. "Overall, we think economic growth will continue this year, but at a moderate pace compared to historical recovery standards. The Department of Labor reported the nation’s January unemployment rate fell to 9.7 percent, and the economy lost 20,000 jobs, down from the 85,000 jobs lost in December. Job losses have trended down since peak losses in January 2009. Fannie Mae (NYSE: FNM) is also optimistic about a housing recovery. [Read the full article]

Headline CPI came out Friday morning and surprised to the downside, 2.6% year-over-year versus 2.8% expected. Core CPI was also cooler than expected at 1.6% versus the 1.8% predicted by economists. Watchers of the monetary aggregates aren’t as surprised, but who watches M2 anymore? Every economic theory enjoys its time in the sun, but ideas fall in and out of popularity. Monetarism is no different. Money supply data used to be pored over upon its release by the Fed. If it was 4:30 on a Thursday, you could be sure to find professional and amateur Fed-watchers alike holding their collective breath in anticipation of the new data. Those days are long gone, as the Ms seemingly haven’t had the same predictive power (more on this and its deflationary portents next week). We believe that the tracking and analysis of money supply will enjoy its day in the sun again, and in the meantime we plan to keep watch. [Read the full article]

You may also like...