WASHINGTON (7/19/13)--The benchmark rate for U.S. 30-year fixed-rate mortgages dropped to an average of 4.37% this week from a two-year high of 4.51% the previous week, Freddie Mac said Thursday.
"Fixed-mortgage rates fell as Federal Reserve Chairman [Ben] Bernanke helped ease market concerns about the Fed reducing its bond purchases ... indications of a slowing in the economic recovery also placed downward pressure on mortgage rates," said Frank Nothaft, Freddie Mac's chief economist (MarketWatch July 18).
Since early May and including this week's decline, the average rate for the 30-year fixed-rate mortgage has risen slightly more than one percentage point, sparking concern about the effect of higher rates on the recovery of the housing market, MarketWatch said.
Also, the 15-year, fixed-rate mortgage fell to 3.41% in the week ended July 18 from 3.53% the previous week, Freddie said Thursday.
In a related matter, Bernanke said Wednesday before a congressional panel that the Fed's proposed timeline for scaling back its $85 billion-a-month bond-buying program has not been finalized (MarketWatch July 17).
"I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course," Bernanke told the House Financial Services Committee.
If the economy progresses as forecast, the Fed anticipates it would taper the pace of the $85 billion asset-purchase plan "later this year" and end it "around midyear" in 2014, Bernanke said, repeating remarks he made in mid-June, MarketWatch said.
WASHINGTON (7/19/13)--Initial U.S. claims for unemployment benefits fell 24,000 last week, to a seasonally adjusted 334,000--the lowest level in four months, the Labor Department said Thursday.
The decline, which resulted in the lowest reading since March, is due in part to an ebbing of the effects of seasonal auto-plant shutdowns. It is a positive development for hiring and the most recent indication of steady improvement in the labor market (The New York Times, The Wall Street Journal, Bloomberg.com and Moody's Economy.com July 18).
Because many factories shut down to retool in July, the month's jobless-claims readings can be volatile, the Times said. However, a four-week moving average of claims--which smooths out weekly volatility--still dropped 5,250 last week from the previous week.
Continuing claims for unemployment benefits for the week ended July 6 increased 91,000--to 3.11 million.