Mortgage rates inched higher in the latest week and remain at three-year lows which has been a boon for the housing market. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 3.65% this week from 3.64% in the previous week and down from 3.73% in the week ended September 19. Freddie Mac says that while mortgage rates generally held steady this week, overall mortgage demand remained very strong, rising over 50% from a year ago thanks to increases in both refinance and purchase mortgage applications.
The closely watched S&P 500 is down nearly 5% since the high seen on September 19, with most of the damage done this week. The ISM Manufacturing Index on Monday and today's ISM Service Index, both below expectations kicked off the fresh recession talk. However, yesterday, New York Fed President Williams said the baseline economic forecast remains "a positive one." "Right now, the outlook is actually very favorable," Williams said yesterday and added that GDP growth is around 2% rate, with a "very strong" labor market and inflation near a 2% rate. It's hard to imagine the holiday season being a bust with a consumer so willing and able to spend, which bodes well for the 4th quarter Gross Domestic Product.
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