|Long-Term US Mortgage Rates Fall; 30-Year at 4.40 Percent
Long-term U.S. mortgage rates fell this week, benefiting potential homebuyers with the spring buying season underway.
Mortgage buyer Freddie Mac said Thursday the average rate on 30-year, fixed-rate mortgages dipped to 4.40 percent from 4.44 percent last week. The benchmark stood at an average 4.10 percent a year ago.
The decline followed scant movement in long-term rates last week and a months-long stretch of increases in January, February and early March as interest rates generally rose.
The average rate on 15-year, fixed-rate loans declined to 3.87 percent from 3.90 percent last week.
As trade tensions have escalated in recent weeks between the U.S. and China, investors have been switching into safer assets like bonds. That has pushed bond prices higher and suppressed their yields, which move in the opposite direction and tend to influence mortgage rates. The yield on the closely watched 10-year Treasury note fell this week amid trade anxiety, then steadied Wednesday at 2.80 percent, the same as last week. The 10-year note was back up at 2.82 percent Thursday morning.
Reflecting the demand for homes, applications for new mortgages fell 3.3 percent in the week ended March 30 from a week earlier, the Mortgage Bankers Association reported.
“Millennials continue to fight their way into a very crowded purchase market. Cash buyers are gaining ground and taking share away from millennials, but rate increases and steady home price appreciation is compelling these first-time buyers to be very aggressive and get in before rates and values go even higher,” says The Collingwood Group Chairman Tim Rood.
read more: NY Times
Increasing Lower-Income Delinquencies Could Forecast Larger Economic Problems
A recent study tracking delinquencies among mobile-home loans could signal the build-up of troubling trends. Are increasing mobile home delinquencies the “canary in the coal mine” that foreshadows larger problems impending for the housing market and for the broader economy?
According to research cited by UBS, a global financial services firm, mobile-home loan delinquencies are up 2 percent year-over-year. Moreover, the 30-day-plus delinquency rate has reached nearly 5 percent, which puts it at the highest level since 2005.
This spike among mobile-home delinquencies is not being echoed among single-family rental (SFR) home loans. SFR 30-day-plus delinquencies have been on a steady downward trend for several years now. Mobile-home 30-day-plus delinquencies, however, began an upward climb around Q3 2016.
According to UBS, the increase in mobile-home delinquencies could be a sign that some lower-income Americans are not feeling the benefits of the ongoing economic recovery and growth. A UBS survey found that roughly three out of five consumers making less than $40,000 a year indicated that they struggled to pay their expenses.
In a statement, UBS said, “We interpret this data to mean that these individuals have not largely benefitted from these macro-dynamics, and may also be disproportionately exposed to industries that have experienced compression — rather than expansion — in the current economic conditions, such as retail or some areas of energy extraction.”
read more: DS News
U.S. Jobless Claims Rise; Continuing Claims Lowest Since 1973
New applications for U.S. unemployment benefits increased more than expected last week, but the number of Americans on jobless rolls fell to its lowest level since 1973, pointing to tightening labor market conditions.
Initial claims for state unemployment benefits rose 24,000 to a seasonally adjusted 242,000 for the week ended March 31, the Labor Department said on Thursday. Data for the prior week were revised to show 3,000 more claims received than previously reported.
Economists polled by Reuters had forecast claims rising to 225,000 in the latest week. Last week’s increase likely reflected difficulties adjusting the data around moving holidays like Easter and school spring breaks.
The labor market is considered to be near or at full employment. The jobless rate is at a 17-year low of 4.1 percent, not too far from the Federal Reserve’s forecast of 3.8 percent by the end of this year.
The Labor Department said claims for Maine and Colorado were estimated last week. It also said claims-taking procedures in Puerto Rico and the Virgin Islands had still not returned to normal after the territories were devastated by Hurricanes Irma and Maria last year.
read more: Reuters
U.S. Trade Gap Widens for Sixth Month Ahead of Trump Tariffs
The U.S. trade deficit widened by more than forecast to a fresh nine-year high in February on broad-based demand for imports, ahead of Trump administration tariffs that have raised the specter of a trade war.
The gap increased 1.6 percent in February to $57.6 billion, compared with the median estimate of economists for $56.8 billion, Commerce Department data showed Thursday. It was the sixth straight month with a wider deficit, the longest streak since 2000. Imports and exports both registered gains of 1.7 percent.
While President Donald Trump has vowed to shrink the trade deficit, it may keep growing thanks to rising household spending, strong business investment and tax cuts that are boosting demand for imports. At the same time, his tariffs on some imported steel and aluminum, along with proposed taxes by U.S. and China on goods from each country, represent a wild card for the outlook and have sparked financial-market swings in recent weeks.
Even before the metal tariffs took effect with exceptions for a number of trading partners, the fees were already making business more difficult for U.S. manufacturers and other buyers. The Institute for Supply Management said earlier this week that the tariff announcement helped send a measure of raw-material prices paid to an almost seven-year high in March, as businesses began stocking up.
read more: Bloomberg
Please reach out if your company is making news that you would like to see in this space.
Chief Marketing Officer