Mortgage Rate News
Interest rates have continued to drop since mid October with the average 30-yr fixed rate mortgage recently dancing just around 6%.
Analysis
It’s a mixed bag. There’s no way around the negative impact that flat home prices, cutbacks in new homes construction and ever-decreasing consumer spending continue to have on the overall economy. Manufacturers have experienced increases in overseas orders, but this is largely due to the weakened value of the dollar.
There are some positive indicators though.
Service companies that comprise the majority of U.S. jobs continue to report growth. Treasury notes have fallen and the S&P’s rising stock index signals optimism about interest rates holding when the Fed convenes next week.
But any pick-up in growth that was seen in the third quarter can be seen screeching to a halt under the weight of troubled financial markets, the downturn in construction, the increasing cost of fuel and food and declining home values.
Predictions
There is a high probability that Fed will cut the Federal Funds Rate when it convenes on the 11th.
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