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Losses and Gains: A Tale of Two Quarters

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Mortgage and Lending with The Federal Savings Bank/Lending in 50 states NMLS # 109616

In economic news, the 2nd read on Q2 2020 Gross Domestic Product (GDP) was adjusted to -31.7% and where it is the worst quarterly read ever. However, Q3 2020 is expected to be the highest gain ever and the pandemic induced recession will be the shortest on record. The Atlanta Fed's GDPNow is estimating a near 26% increase in Q3. That could be some rebound! GDP measures the total value of goods and services produced in the U.S.

Weekly Initial Jobless Claims remained above the 1 million mark in the latest week at 1.006 million versus the 1 million expected. Continuing claims fell to 14.535 million from 14.844 million. Americans are still waiting for stimulus aid from the government but lawmakers were at a stalemate and decided to take their much-needed August recess and not pass the stimulus bill this month. Some states are offering an enhanced unemployment benefit of $300 that will be provided by FEMA.

Mortgage rates edged lower in the early part of the week and continue to hover at historic lows. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 2.91% early this week from 2.99% last week with 0.8 in points and fees. Freddie Mac said that low rates continue to incentivize potential buyers and the home-buying season, which shifted from spring to summer, will likely continue into the fall. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage.

 

Historic fall in GDP could see historic rise. Weekly Initial Jobless Claims remain above the 1 million mark.

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