Disappointing employment report drives mortgage rates to record lowby Tim Manni
Below is an excerpt from the latest Mortgage Rates Radar from HSH.com.
HSH.com releases its latest Weekly Mortgage Rates Radar showing a downturn in mortgage rates from the previous week. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM). Average rates for both moved downward during the week ending July 10.
Rates on the two most popular types of mortgages moved to or held at record lows, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by 4 basis points (0.04 percent) to 3.74 percent. Conforming 5/1 hybrid ARM rates remained unchanged, closing the Wednesday-to-Tuesday wraparound weekly survey at a record-low-matching average rate of 2.81 percent.
“The June employment report on Friday underscored how soft the economic climate is at the moment,” said Keith Gumbinger, vice president of HSH.com. “Total job growth in the last three months hasn’t even equaled that seen in February, and there are other signs that the economic slump is spreading.”
The Producer Price Index, which measures the price of goods at the wholesale level, is due out on Friday, and will be followed by the Consumer Price Index release on July 17. Both of these indices are closely watched as signs of the health of the economy.
“Arguably, lower rates will help boost borrowing by both consumers and businesses, but uncertainty about future demand for goods and services or future job prospects continues to have a chilling effect,” Gumbinger said. “Businesses are holding off expanding and hiring, and consumers aren’t borrowing or spending as they would in more certain times.”