U.S. Interest Rates Drop Despite Economic Improvement
By Dan Giordano - Sun Feb 19, 10:32 am
Homes.org Releases Mortgage Rates Update – Interest Rates Drop Despite Economic Improvement
AllTop Financial News, (PR) February 19, 2012
Homes.org releases new weekly analysis of mortgage rates shows that interest rates fell this week which wasn’t what analysts were expecting. The mortgage report explains the current rates for 30-year and 15-year fixed mortgage, how economic improve is affecting interest rates and what’s likely to affect mortgage interest rates in the coming days and weeks.
The Homes.org weekly mortgage rate report shows that interest rates fell this week, which wasn’t what many analysts were expecting. The decrease of four basis points brings mortgage rates down to new record lows. Traditionally, when the economy improves, which this week’s economic reports continue to suggest, interest rates will rise. But the Fed’s actions to keep base rates at near zero and uncertainty in Greece, which is affecting the Eurozone’s economy, are helping to suppress rising mortgage interest rates.
Current interest rates are:
4.10% – average rate for a 30-year fixed rate mortgage
3.35% – average rate for a 15-year fixed rate mortgage
This week there are a number of economic reports coming out that may have an effect on interest rates. The reports include:
- Tuesday – January Retail Sales report
- Thursday – Producer Price Index
- Thursday – Consumer Price Index
- Thursday – Jobless Claims report
- Thursday – New Housing Starts report and the Jobs report
- Friday – Consumer Sentiment report for the first week of February
The economic reports started off well for the U.S. economy this week with the January Retail Sales report showing a gain of 0.4%. Auto sales fell but spending was up in other areas including home and garden supplies. The Producer Price Index also showed very modest improvements going up by only .01%.
The bigger economic news was the unexpected drop in jobless benefit claims last week which was at its lowest level in four years. There were 13,000 less claims, that’s below even the lowest economist expectations and further suggests that the jobs situation is improving in the U.S.
The other report that will have the biggest impact on the housing market is the Housing Starts report. The report showed a 1.5% increase in housing starts in the month of January. Building permits were also up from the previous period.
Homes.org is forecasting that given the better than expected economic reports this week and the already record low mortgage interest rates, we’re likely to see a slight increase next week.