What Did Interest Rates Do This Week? The Mortgage Market Report:
(Reprinted with permission from Marie Funston, Sr. Mortgage Advisor.
Based on Freddie Mac weekly average survey )
30-yr Fixed – Slightly Higher
This Week: 4.92%
Last Week: 4.87%
1yr Ago: 6.46%15-yr Fixed – Slightly Higher
This Week: 4.37%
Last Week: 4.33%
1yr Ago: 6.14%Jumbo Fixed
Average 30-yr Fixed: 5.895%
Highlight of This Week’s Major Economic Reports
Who would’ve thought a few months ago that we’d see the Dow top 10,000 again this year, but here we are at the beginning of the 4th quarter, and the stock market seems to be on a relentless drive, further fueling what is now the expectation of economic growth before the end of the year. And, while money was being poured into the stock market, they were pulled out of the safe haven of US Treasuries, which has consequently caused the spike in interest rates.
Furthermore, recent readings on local market conditions across the country have revealed growing stability – and even some consistent improvement – the likes of which we haven’t seen in two years. This supports the consensus that a technical end to the recession is looming near. However, with unemployment still problematic and the issue of health care still unresolved, consumers aren’t feeling as upbeat as the numbers may convey. As a result, consumer spending is still lagging with Retail Sales reporting a 1.5% slide last month.
What to Look for Next Week
More inflation reports and an updated peak at the housing market will headline next week’s economic calendar. Inflation is expected to remain tame, while home sales are expected to post positive results, as first-time buyers flock to take advantage of the tax credit.
Stay Informed: What’s in the News
“When Will Recession End?” from Texas A&M Real Estate Center
Three things have to happen before the current recession can be declared ended. One is underway, said Dr. Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University.
“I think the economy will begin to turn for the better once the health care and cap-and-trade issues are settled. Those two political debates are creating substantial uncertainty for business owners and investors,” he said.
The personal savings rate is the second trend to watch, said Dotzour.
“Over 70 percent of the U.S. economy is consumer spending,” he said. “When the savings rate finally levels out, consumer spending will start to increase again.”
Increased corporate profits are the third trend that must occur to bring the recession to an end. There is some indication that has already begun. The last three data points were all up. Rising profits lessen the urge for companies to lay off workers.
Research Economist Dr. Jim Gaines added that the increased corporate profits have come from reduced costs, not the kind that leads to expansion.
“Keep your eye on these three issues,” Dotzour said. “When they are resolved, the economy will begin to turn the corner.”
“Texas Cities Labor Away” from Texas A&M Real Estate Center
Four of the five best labor markets in the country are in Texas, according to a new study compiled by Portfolio.com.
Austin leads the way, followed by San Antonio. Houston ranks fourth and Dallas–Fort Worth fifth. Landing at third is Baton Rouge.
All 100 metropolitan areas in the study, including those in Texas, have seen employment decline since last year. However, while 5 percent of the nation’s private-sector jobs have disappeared since June 2008, the collective decline for the ‘Texas Four’ has been 2.6 percent.
The Texas markets still have 589,500 more jobs than they did five years ago.
Portfolio.com used a nine-part formula to analyze employment trends in the nation’s 100 largest labor markets. The formula used midyear U.S. Bureau of Labor Statistics data for 2004–09, including unemployment rates and trends, and raw and percentage changes in private-sector employment.
Marie Funston | Sr. Mortgage Advisor | (512) 750-7270
9442 N Capital of Texas Hwy., Suite 1-600
Austin, TX 78759
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