Home borrowing costs spiked higher in the latest week but remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose 14 basis points to 2.79% this week with 0.7 in points and fees. A year ago at this time, the rate averaged 3.65%. Sam Khater, Freddie Mac’s Chief Economist said, “While mortgage rates are expected to increase modestly in 2021, they will remain inarguably low, supporting homebuyer demand and leading to continued refinance activity. Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result.”
Americans filing for first-time unemployment benefits jumped in the latest week to 965,000 from 784,000. Continuing claims, or those receiving benefits for at least two weeks straight, rose to 5,271,000 from 5,072,000. The lockdowns in several states have increased and are contributing to the uptick in new benefits. There was an additional 285,000 who filed for unemployment benefits through the Pandemic Unemployment Assistance program, up 100,000 from the previous week. Those are self-employed or gig workers, who aren't covered under regular benefits.
Recent comments from Fed members had suggested that the Fed's $120B per month purchase program of Mortgage-Backed and Treasury securities may be due for tapering in 2021. But Vice Fed Chair Clairda and Fed Governor Brainard laid those fears to rest on Wednesday affirming that QE policy is a long way from being adjusted. Ms. Brainard said, "The U.S. economy remains "far away" from the Fed's goals and as a result, the bond-buying program will likely continue for "quite some time."
Fed Chair Powell will be speaking this afternoon around 12:30 p.m. ET and may also reiterate the need for asset purchases for some time to come.