Home borrowing costs continued to rise this week but remain at historically low levels. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 2.97% from 2.81% with 0.6 in points and fees. A year ago at this time, the rate averaged 3.49%. Sam Khater, Freddie Mac’s Chief Economist, said, “Though rates continue to rise, they remain near historic lows. However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.”
First-time unemployment claims remain stubbornly high but fell in the latest week while 10 million Americans are still without a job. Weekly Initial Jobless Claims declined to 730,000 for the week ended February 20, 2021, from 841,000 in the previous week. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 4,419,000 from 4,520,000. 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.
In economic news, Durable Orders surged by 3.4% in January from 1.2% in December while the Q4 2020 2nd read on Gross Domestic Product (GDP) remained at 4.1%. The Atlanta Fed's GDPNow model estimates a 9.5% gain for Gross Domestic Product for Q1 2021. And if big GDP contributing states like California and New York fully reopen their economies, the economy could have further room to grow.