The "spring slump" predicted by some economists may not be as bad as anticipated; but some of the news, particularly the report that the Federal Reserve is worried about the state of the U.S. economy, pushed mortgage rates to new record lows last week.
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan declined by 4 basis points (0.04 percent) to 3.61 percent, near to the record low set in 2012. Average rates for 15-year fixed-rate mortgage loans dropped by 3 basis points (0.03 percent) to 2.86 percent, another new record low for this mortgage term. FHA-insured, 30-year fixed-rate home loan rates declined by 2 basis points (0.02 percent) to an average rate of 3.26 percent, another new record low. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM) also dropped by 3 basis points (0.03 percent) to 2.57 percent, another new record low point for this loan product. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
The report from the Federal Reserve's policy meeting last week suggested that the Fed might expand its program of purchasing Treasuries and mortgage-backed securities shows the concern of Fed members about the continued slow pace of economic recovery.
April's survey from the Institute of Supply Management showed that, at least on the manufacturing side, the U.S. has close to zero growth.
On the other hand, the good news last week is that 165,000 people were hired in April, higher than expected. In addition, the March and February jobs reports were revised upward and the unemployment rate fell to 7.5 percent.
While the number of new hires needs to be bigger in order to move the unemployment rate lower and to rev up the economy at a faster pace, these employment reports are definitely an improvement.
The mortgage experts at HSH.com anticipate a small increase in mortgage rates this week in response to the positive economic news.
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