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Mark Hemingway

Mortgage Market Update for January 7th

Wednesday, January 13, 2021 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

Home borrowing costs hit fresh record lows this week and continue to buoy the housing market. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 2.65% this week with 0.7 in points and fees, the lowest since record-keeping began in 1971. A year ago at this time, the rate averaged 3.64%. Sam Khater, Freddie Mac's Chief Economist said, "The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season."

Americans filing for first-time unemployment benefits fell in the latest week to 787,000 from 790,000 and well below the March and April highs. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 5,072,000 from 5,198,000. The sector was decimated by the pandemic-induced shutdowns in March, April and May and now the fears are increasing that additional lockdowns will take place in certain parts of a country.

The badly-hurt service sector gained some strength back in December after being decimated by the lockdown measures that took place last spring. The ISM Service Index rose to 57.2 last month from 55.9 in November. The Institute for Supply Management says that 'this reading represents a seventh straight month of growth for the services sector, which has expanded for all but two of the last 131 months.' Spokesperson Anthony Nieves said, "Most respondents are cautiously optimistic about business conditions with the recent approval and impending distribution of vaccines."

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