We could go on and on about how rates have dropped again (costs fell 1/4 point across the board), but we have been singing the same tune for the past month and we don’t want to be too repetitive. The 30-year fixed is now at 3.5 percent (3.592 percent APR) and the 15-year fixed is at 2.750 percent (2.953 percent APR). For borrowers with certain characteristics, it is possible to find near no-cost loans for rates as low as 3.750 percent (30-year fixed, 3.737 percent APR) and 3.000 percent (15-year fixed, 2.986 percent APR). We find it hard to believe qualified borrowers have not refinanced to record low rates… but if you haven’t, give us a call at 805.543.LOAN for a free, quick and easy discussion about how you can save thousands.
Now that is out of the way, let’s move on to some numbers. We have been seeing economic indicators from Quarter 1, and the numbers are mixed.
– The U.S. GDP (Gross Domestic Product) came in at 2.2 percent growth, which was lower than expected (2.5 to 3.0 percent was the prediction). For some context, the real drop came from a decline in government spending. When taken individually, the private sector components of the GDP actually came in at 3.5 percent growth.
– Consumer consumption stayed strong in the first quarter, logging a 2.9 percent increase in personal consumption expenditures.
– Defense spending dropped 8.1 percent, which accounts for the decline in government spending.
– March jobs numbers took a u-turn. After a quarter full of steady improvements, hiring slowed (just 120,000 new jobs) and more people applied for unemployment benefits (highest four-week average in three months).
– In February, home prices fell to their lowest level in 10 years.
As you can see, it has been a mixed several months. The Fed reported that we will continue with moderate growth for some time, and the expectation is that no further stimulous measures will be instituted (quantitative easing). Meanwhile, the Fed said it will keep rates low through 2014.