Mortgage rates continued their streak of small fluctuations. This time, all 10 of the programs in our Mortgage Rate Tracker either fell or stayed the same (for the October 22 rates, go HERE). Remember: don’t get bogged down in day-to-day changes. The larger picture is that rates are at the lowest end of the spectrum, near record lows.
There will be plenty of housing and economic data released later in the week, including the FHFA Home Price Index, New Home Sales, Durable Good Orders, q3 U.S. GDP and a Consumer Sentiment survey. For now, we have a few news items:
Caterpillar has reported that its third quarter earnings beat expectations, but outlook for the recovery is for more of the slow, plodding growth we have seen over the past year. Doug Oberhelman, CEO of Caterpillar, the world’s largest construction and mining equipment maker, addressed the housing market:
“The bubble that we went through is being worked off, [and] there’s no question in my mind that housing starts will inch up… It’s contingent on the unemployment rate, how many people are working, and when that’s solved we’ll see housing starts back over a million.”
A report by real estate statistics research firm RealtyTrac reminds us that although home prices have shown a broad nationwide improvement, the recovery still has a ways to go. RealtyTrac studied 919 U.S. counties, grading them on five metrics: average home prices, unemployment, foreclosure inventory, foreclosure starts and distressed sales. In total, 65 percent of the markets had at least three of the five metrics below 2008 levels. Said RealtyTrac Vice President:
“The U.S. housing market has shown strong signs of life in recent months, but many local markets continue to struggle with high levels of negative equity as the result of home prices that are well off their peaks. In addition, persistently high unemployment rates are hobbling a robust real estate recovery in most areas.”
Diana Olick’s latest column on CNBC points out that small improvements on the market have distracted us from just how far we have left to go. Housing starts (43 percent) and permits (27 percent) are up from a year ago, but still at half the healthy level. About 15 million mortgage holders – 31 percent – are still underwater.