Counting Our Blessings
Today is July 4th. Our country is almost 250 years old. If you read the headlines, you would think that our country is in more trouble than it has ever has been. True, our country is not perfect, and certainly the fighting emanating from our Nation’s Capital does not make us the envy of the world politically. On the other hand, if you take a look at the numbers, our country is again leading the western world with regard to the recovery from the deep world recession.
After peaking at over 10% during the recession, our present unemployment rate is less than 5.0%. The average unemployment rate of the European Member countries is well over 7.0%. During the latter stages of the recovery we have been consistently adding between 150,000 and 200,000 jobs per month. Concurrently, our real estate market has regained just about all of the losses sustained during the recession.
Some are wary that the Federal Reserve Board has raised interest rates four times during the past 18 months. The fact that the Fed is comfortable raising rates for the first time in a decade is evidence that they are getting more comfortable regarding the state of the economy. That does not mean that our economy, our jobs picture and our real estate market does not have room for improvement — which is why rates continue to be historically very low. But we have come a long way and we continue to improve. Hopefully we will see more of this improvement when the jobs report is released this Friday. In the meantime, happy 4th of July.
The Weekly Market Update
Rates were down slightly last week, but rose after the survey was released. For the week ending June 29, Freddie Mac announced that 30-year fixed rates fell to 3.88% from 3.90% the week before. The average for 15-year loans remained at 3.17%, and the average for five-year adjustables moved up to 3.17%. A year ago, 30-year fixed rates averaged 3.48%. Attributed to Sean Becketti, chief economist, Freddie Mac -- "The 30-year fixed rate fell 2 basis points to 3.88 percent this week. However, much of our survey was conducted prior to Tuesday's sell-off in the bond market which drove Treasury yields higher. Rates on home loans may increase in next week's survey if Treasury yields continue to rise."
Attributed to Sean Becketti, chief economist, Freddie Mac -- "The rate on 30-year loans rose 2 basis points over the week to 3.91 percent. However, our survey was conducted before investors drove Treasury yields sharply lower in a reaction to the surprisingly weak CPI release. If that drop in yields sticks, rates on home loans are likely to follow in next week's survey."
Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.