After rising seven out of the last eight weeks, mortgage rates edged lower this week. Freddie Mac reports that the 30-year fixed-rate mortgage fell five basis points this week to 4.85% with an average 0.50 in points and fees. Freddie Mac said, "The modest decline in mortgage rates is a welcome respite from the rapid increase in rates the last few weeks. While the housing market has clearly softened in reaction to the rise in mortgage rates, the economy and consumer sentiment remain very robust and that will sustain purchase demand, particularly in affordable markets and neighborhoods."
Fannie Mae released its October 2018 Economic and Housing Outlook today saying that 2018 and 2019 economic growth outlook is steady as housing falters. The report revealed that economic growth (Gross Domestic Product) is forecasted to increase 3% in 2018 and 2.3% in 2019. After a strong 2018 second quarter, growth will ease a bit due to a deceleration in consumer spending and business investment growth. Fannie went on to say, "Residential fixed investment is expected to have fallen for a third consecutive quarter, with home sales and mortgage demand continuing to soften amid rising interest rates. While the amount of for-sale inventory of existing homes is finally showing some improvement, it remains tight in many areas of the country, especially in the lower-priced tiers."
U.S. Stocks have been on a seesaw rise this week up big one day, down today. China trade issues, European debt woes along with the Federal Reserve signaling more rate hikes ahead were a few of the factors that raped up volatility. The Dow Jones Industrial Average was up nearly 600 points on Tuesday, slightly lower yesterday and down nearly 400 points today. Investors looking to secure some profits have also contributed towards today's losses.
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