The October jobs report blew past expectations, and that should put borrowers on notice that interest rates could climb higher on mortgages and other financial products.
There is a documented disparity occurring in this housing recovery: Shares of U.S. homebuilding companies are slumping as home improvement retailers are seeing surging sales.
Anticipation of the Federal Reserve’s continuation of its bond-purchasing stimulus program helped mortgage rates drift downward for a second consecutive week, Freddie Mac said.
The Fed policy makers once again described an economic recovery of moderate pace, but added that the housing market has slowed, mostly from higher mortgage rates. The surge in rates from historic lows over the summer months was in large part from anticipation of the Fed’s expected wind-down of bond purchases.
Growing sentiment that the Federal Reserve won’t start dialing back bond purchases this year helped push down fixed mortgage rates to their lowest levels since June, according to Freddie Mac.
The nation’s largest bank Thursday made what amounted to a rare admission of mistakes and wrongdoing that have resulted in the imposition of a $920 million fine by U.S. and U.K. regulators.
Average fixed mortgage rates declined this week as the same weakening economic recovery which prompted the Federal Reserve to keep intact its bond-buying program also put a lid on near-term rate increases.
Foreclosure inventories carrying big discounts are virtually exhausted and investor/flippers are competing with average homebuyers in a market recovery that could be hampered by “flippers selling to other flippers.”
In an environment of rising interest rates, little activity is good news for the housing market. Freddie Mac said Thursday that the average 30-year fixed rate on mortgages averaged 4.57 percent this week, remaining unchanged from last week.
Mortgage applications plummeted 13.5 percent, while the refinance share decreased to 57 percent of total activity from 61 percent the previous week — its lowest level since April 2010.