Home borrowing costs hit fresh record lows in the latest survey and continue to buoy the housing market. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 2.81% this week from 2.87% last week with 0.6 in points and fees. A year ago at this time, the rate averaged 3.69%. Sam Khater, Freddie Mac’s Chief Economist said, “As we hit yet another record low, the tenth record this year, many people are benefiting as refinance activity remains strong."
Americans filing for first-time unemployment benefits continued to run stubbornly high in the latest week. Weekly Initial Jobless Claims came in at 898,000 for the week ended October 10, down from the 845,0000 in the previous week. The 898,000 is well below the 6 million seen in late March and early April at the height of the pandemic. Continuing claims, which measures those receiving benefits for at least two weeks straight, fell to 10,018,000 from 11,979,000.
The housing sector remains strong and a workhorse for the U.S. economy. The MBA reports that mortgage applications to purchase new homes surged 38% in September from a year ago while a 5% decline was seen month over month from August. The MBA estimates that new single-family home sales were running at an annual pace of 869,000 units in September. The MBA broke down the numbers as such. Conventional loans composed 71.3% of loan applications, FHA loans 17.85, RHS/USDA loans 0.8% and VA loans 10.1%. The average loan size of new homes increased from $348,576 in August to $354,316 in September.