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Mark Hemingway

Mortgage Market Update for February 2nd

Thursday, February 2, 2017 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

U.S. employers announced more job cuts in January than in December mostly due to corporate downsizing in the retail and as seasonal workers were dismissed. Outplacement firm Challenger, Gray & Christmas reports that employers announced 45,934 payroll cuts in January, +37% from December in the retail sector. Cuts were 39% lower than January 2016.

Mortgage rates were unchanged this week after last week's Gross Domestic Product showed tepid growth in the final quarter of 2016. The 30-year fixed conventional mortgage rate ($424,000 or less) remained at 4.19% this week with 0.5 in points and fees, as reported by Freddie Mac. However, to put it in historical perspective, mortgage rates were near 19% back in the early 1980s. Last year this time the rate was 3.79%.

The U.S. Federal Reserve left its benchmark interest rate unchanged on Wednesday citing low inflation pressures and economic activity that has continued to expand at a moderate pace. The Fed Funds Rate remains at 0.50-0.75% range, which leaves the Prime at 3.75%, which is the Fed Funds Rate plus 3 points. The Fed said that job gains remained solid and the unemployment rate stayed near its recent low. In addition, household spending has continued to rise moderately while business fixed investment has remained soft, and that measures of consumer and business sentiment have improved of late.

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