By Dees Stribling, Contributing Writer
According to the Black Knight (formerly LPS) First Look report for January, the U.S. mortgage delinquency rate (loans 30 or more days past due, but not actually in foreclosure) decreased to 6.27 percent in January from 6.47 percent in December, and declined by more than 10 percent year over year.
Also, the percent of loans in the foreclosure process dropped to 2.35 percent in January, compared with 2.48 percent in December, and were down 31 percent compared with a year ago. The percentage of loans in the foreclosure process is at the lowest level since late 2008, when foreclosures started going through the roof.
The number of delinquent properties, though not in foreclosure, is down 365,000 properties year over year in January, and the number of properties in the foreclosure process is down 528,000 properties since this time last year. All together as of January 2014, there are about 4.3 million residential properties either in delinquency or foreclosure, down from 5.2 million in January 2013.
Yellen Hints Tapering Will Continue
Federal Reserve Chair Janet Yellen was before the Senate Banking Committee on Thursday, giving the testimony she’d been scheduled to give on Feb. 12, but which was delayed by bad weather. Yellen in fact had some things to say about the weather, namely that it’s too soon to know the impact the weather has had on the economy, even though it seems to have weakened some indicators in January and February, especially “adversely” affecting consumer spending, a linchpin of the economy.
Moreover, “in the weeks and months ahead, my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations,” she told the Senate. She said that only a “significant” change in the outlook would inspire the Fed to alter the taper, which is slated for another $10 billion cut from Fed bond-buying in March.
Yellen also referenced interest rates in saying that “the unemployment rate is not a sufficient statistic to measure the health of the labor market … As we go to a fuller consideration of how the labor market is performing, we need to take all of those things (such as long-term unemployed and labor force participation) into account.” In other words, the 6.5 percent unemployment rate that was once the threshold for the Fed considering an interest rate hike isn’t that important to the central bank any more.
4Q GDP Numbers Released
Real gross domestic product grew 1.9 percent in 2013, a drop from the 2.8 percent uptick recorded in 2012, the U.S. Commerce Department reported Friday morning. Output grew in multiple categories last year, including personal consumption, exports, non-residential fixed investment, residential fixed investment and private inventory. However, those increases partly were offset by a 2.3 percent decrease in government spending at all levels, including a 7 percent drop in defense spending and a 5.2 percent decline in federal government spending overall.
During the fourth quarter of 2013, real GDP grew 2.4 percent, a decline from the 4.1 percent during the third quarter. Output in numerous categories increased at a stepped-up pace from the third to fourth quarters: including real personal consumption, non-durable goods, services, nonresidential fixed investment, equipment, intellectual property and exports.
Growth continued at a slower pace in several other categories during the fourth quarter, including durable goods and non-residential structures. Those increases were offset by a 12.8 percent decline in federal government spending during the fourth quarter, including a 14.4 percent drop in defense spending. During the third quarter, federal government spending declined 1.5 percent.
Preliminary estimates last month had placed GDP growth at 3.2 percent. The Commerce Department attributed the adjustment in its initial estimate primarily to a smaller than anticipated increase in personal consumption expenditures.
Wall Street seemed to be soothed by Janet Yellen’s words on Thursday, with the Dow Jones Industrial Average gaining 74.24 points, or 0.46 percent. The S&P 500 and the Nasdaq were up 0.49 percent and 0.63 percent, respectively.