Home borrowing costs were unchanged this week and remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage held steady at 2.73% with 0.7 in points and fees. A year ago at this time, the rate averaged 3.47%. Sam Khater, Freddie Mac’s Chief Economist. “New COVID-19 cases are receding, which is encouraging and that has led to a rise in Treasury rates. But, the run-up in Treasury rates has not impacted mortgage rates yet, which have held firm.”
First-time unemployment claims remain stubbornly high while 10 million Americans are still without a job. Displaced workers filing for first-time unemployment benefits fell in the latest week to 793,000 from 812,000. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 4,545,000 from 4,690,000. Several of the states that were under lockdown measures have slowly begun to open up. When the economy fully reopens many workers should be able to go back to work.
"Published unemployment rates during COVID have dramatically understated the deterioration in the labor market," Fed Chair Powell said yesterday. Speaking before the New York Economic Club, Fed Chair Powell said yesterday that there are misclassification errors within the numbers and the real unemployment rate is closer to 10%. The current unemployment rate is 6.7%. "We are still very far from a strong labor market whose benefits are broadly shared. The pandemic has led to the largest 12-month decline in labor force participation since at least 1948."