Economy Watch: Interest Rates Cool a Bit
By Dees Stribling, Contributing Editor
Mortgage interest rates spiked unexpectedly a few weeks ago and have been easing off since. Freddie Mac released its most recent Primary Mortgage Market Survey on Thursday, showing that average fixed mortgage rates dropped for the second consecutive week.
According to the GSE, 30-year fixed-rate mortgage averaged 4.31 percent (plus an average 0.8 points) for the week ending July 25, 2013, down from last week when it averaged 4.37 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 3.49 percent. Also, 15-year rates this week averaged 3.39 percent, down from 3.41 percent last week.
“Mortgage rates eased for the second consecutive week, which should help to alleviate market concerns of a slowdown in the housing market,” noted Freddie Mac chief economist Frank Nothaft in a press statement. “Thus far, existing home sales for June were the second highest since November 2009 and new home sales were the strongest since May 2008.
Mortgage delinquencies up in June
Lender Processing Services said in its First Look report for June, which was released on Thursday, that the percentage of delinquent mortgages experienced an uptick from 6.08 percent in May to 6.68 percent from in June—which represents a 9.91 percent increase. That goes against recent monthly downward trends for the delinquency rate, but some of the increase is seasonal in nature.
Year-over-year, however, the rate of delinquencies—which the company counts as 30 or more days past due, but not in foreclosure—was down 6.5 percent. The percentage of outstanding loans actually in foreclosure was 2.93 percent, which represents both a monthly and an annual drop. In the case of the annual drop, it was a whopping 28.4 percent in June 2013 compared with June 2012.
The states with the highest percentage of non-current mortgages, which combines those in foreclosure with those merely delinquent, were Florida, Mississippi, New Jersey, New York and Maine, reports LPS. Those with the lowest percentage are (mostly) oil-boom states: Wyoming, Montana, Arkansas and both of the Dakotas.
Energy consumption to continue upward trajectory
The Energy Information Administration released a report on Thursday that estimated that worldwide use of energy—mostly for transportation and to produce electricity—would surge by 56 percent over the next three decades (2040 compared with 2010). Fully half of the growth in demand will come from two rapidly emerging, enormously populated places: China and India.
The energy future will not be particularly green, according to the report. Unless current government policies change, the most common energy sources worldwide will remain fossil fuels such as oil, coal and natural gas. In fact, the EIA says, these fuels will account for 80 percent of world energy consumption through 2040.
Wall Street had an up day on Thursday, with the Dow Jones Industrial Average gaining 13.37 points, or 0.09 percent. The S&P 500 advanced 0.26 percent and the Nasdaq was up a more substantial 0.67 percent.