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Mark Hemingway

Mortgage Market Update for June 25th

Friday, June 26, 2020 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

The U.S. saw its biggest daily rise in daily coronavirus cases on Wednesday, two months after the previous record with the resurgence mainly hitting in the South and West. The threat is seen that new infections could curtail the recent reopening of state economies if the pandemic worsens. However, stocks are near unchanged after yesterday's steep losses. The huge rally since the March lows seems to be stalling at current levels as the smart money may be looking to take some profits.

Americans filing for first-time unemployment benefits continue to decline but still remain at unusually large levels due to the pandemic induced shutdown of the U.S. economy. Weekly Initial Jobless Claims came in at 1.48 million versus the 1.35 million expected and down from 1.540 million in the previous week. Continuing Claims fell to 19.522 million from 20.289 million in the previous week. Durable Orders jumped to 15.8% in May from -18.1% in April as economic data continues to rebound from the weak March and April numbers. Final Q1 GDP remained at -5.0%.

Mortgage rates remained at all-time lows in the latest week as the Federal Reserve continues to purchase mortgage-backed-securities on a daily basis in an effort to stabilize the market. Freddie Mac reports that the 30-year fixed-rate mortgage remained at 3.13% with 0.8 in points and fees. Freddie Mac said that after the Great Recession, it took more than ten years for purchase demand to rebound to pre-recession levels, but in this crisis, it took less than ten weeks. The rebound in purchase demand partly reflects deferred sales as well as continued interest from prospective buyers looking to take advantage of the low mortgage rate environment.

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