Mortgage rates improved over last week as generally weak economic data and a revealing Fed meeting drove investors to US Treasuries. The Fed left overnight rates unchanged but reminded us that inflation is under target and they are “prepared to provide additional accommodation if needed”. Gold rose to a record, the dollar weakened and the yield on two-year Treasuries hit an all-time low on speculation Chairman Bernanke will purchase additional US government securities in coming months in a bid to lower long-term interest rates. Durable Good purchases, items meant to last three years or more, were down 1.3%. Existing Home Sales remained at their lowest level since 1997 and New Home Sales were down 29% from one year ago. Home-builder Sentiment remained at a very low level pointing to a weak housing market. Initial Jobless Claims rose by 12,000 to 465,000 and continuing claims, a four-week average of claims, also rose. In a bit of ironic news, the National Bureau of Economic Research declared the longest US recession since the Great Depression ended in June 2009, lasting only 18 months. Did anyone tell the 15 million unemployed Americans, the 5 million foreclosed homeowners to date and the estimated 5 million homeowners pending foreclosure? Currently, the 30 Year Fixed is 4.000% (4.141% APR) and the 15 Year Fixed is 3.500% (3.749% APR).
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