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Mark Hemingway

Mortgage Market Update for January 4th

Friday, January 8, 2021 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

The U.S. stock markets had a strong year in 2020 despite the pandemic-induced shutdowns that had considerable negative effects on the economy. The closely watched S&P rose 16%, the Dow was up 7.3% while the tech-heavy NASDAQ soared 44%. The markets may see some volatility this week given the final jobs numbers for 2020 will be released for December from ADP and the government's Jobs Report that includes Non-Farm Payrolls and the Unemployment Rate.

The new year begins with visions of endless government spending in 2021 and expect more and more stimulus from the government in 2021 and possibly beyond. The Wall Street Journal (WSJ) reports that 'the recent $900 billion stimulus will "at best only be a down payment" and the now $3.3 trillion of total stimulus spending "is just the beginning," it sounds like America is headed into a program of permanent stimulus.' said the WSJ. To fund stimulus, the government does this through increased Treasury security offerings.

Home borrowing costs remained at fresh record lows last week and continue to buoy the housing market. Freddie Mac reports that the 30-year fixed-rate mortgage was at 2.67% with 0.7 in points and fees for the week ended December 31. A year ago at this time, the rate averaged 3.72%. Sam Khater, Freddie Mac's Chief Economist said, "Heading into 2021 we expect rates to remain flat, potentially rising modestly off their record low, but solid purchase demand and tight inventory will continue to put pressure on housing markets as well as house price growth."

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