It’s getting ugly out there, but good opportunities to borrow (scroll down to second article) are out there too…
Economic outlook down on jobs, housing
By Inman_News
Created 03/20/2008
Rising jobless claims [1] and slumping home construction [2] soured the economic outlook in February, as The Conference Board reported today that its U.S. leading index fell for the fifth straight month.
The index, considered a gauge of economic activity over the next three to six months, fell 0.3 percent in February, and now stands at 135. Based on revised data, this index sank 0.4 percent in January, 0.1 percent in December, 0.4 percent in November and 0.5 percent in October.
Jobless claims and building permits made the largest negative contributions to the index last month, followed by vendor performance and consumer expectations, all of which overshadowed large positive contributions from money supply and interest-rate spread.
With February’s decline, the leading index has fallen 1.5 percent (about a 3 percent annual rate) during the six-month span from August 2007 through February 2008. In addition, only two components out of 10 have increased from August to February.
The Conference Board said that the leading index has been on a downtrend since the middle of 2007, and the weaknesses among its components have become very widespread in the last three months; the last time the leading index worsened for five consecutive months was in early 2001.
At the same time, real GDP growth, which measures the total value of goods and services produced by the United States in a given period, fell to 0.6 percent in the fourth quarter of 2007, down from a 4.9 percent annual rate in the third quarter and an average 2.2 percent annual rate in the first half of 2007. The current behavior of the composite indexes suggests that increasing risks for economic weakness are likely to continue in the near term, the board said.
Mortgage rates drop sharply this week
By Inman_News
Created 03/20/2008
Long-term mortgage rates tumbled this week after the Fed cut a key short-term interest rate and on news that inflation in February was weaker than expected, Freddie Mac reported today.
The average rate on 30-year fixed mortgages dropped to 5.87 percent from last week’s 6.13 percent, and the average 15-year fixed rate plunged to 5.27 percent from 5.6 percent.
To qualify for these rates, borrowers must pay points, or fees that lenders charge for loan processing expressed as a percent of the loan, which this week averaged 0.5 on the 30- and 15-year loans.
“Mortgage rates fell this week as various actions were taken to improve market liquidity,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “In addition, the inflation report from the Consumer Price Index (CPI) reflected weaker price increases than consensus expectations. Unchanged in February both including and excluding food and energy costs, it is the first time the core CPI did not report a monthly increase since November 2006.
“Meanwhile, retail sales fell by 0.6 percent in February, contrary to the consensus forecast of a 0.2 percent increase, signaling that the condition of the economy might be weaker than previously thought,” Nothaft said. “Slowing consumer spending and weak employment conditions are among the concerns behind the Fed’s decision to lower the target federal funds rate by 0.75 percentage points in the most recent Federal Open Market Committee meeting.”
According to Freddie Mac, five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.56 percent this week, with an average 0.9 point, down from last week’s 5.58 percent. One-year Treasury-indexed ARMs averaged 5.15 percent, with an average 0.8 point, up from 5.14 percent last week.
Happy Investing,
Jason
Stock.xchng / svilen001 / www.efffective.com
