Mortgage Rates Keep Escalating

Mortgage rates have kept rising over the past month, with one outlet reporting 30-year loans averaging more than 7% this week for the first time since October.

Mortgage News Daily Thursday reported 30-year, fixed-rate mortgages averaging 7.1%, though a weekly lender survey by government-backed loan agency Freddie Mac put the 30-year loan average at 6.65% for the week ended March 2. Most mortgage rate reports are averages based on national lender surveys, and Freddie Mac has noted there is now a wide range of rate offerings.

“As we started the year, the 30-year, fixed-rate mortgage decreased with expectations of lower economic growth, inflation and a loosening of monetary policy,” Freddie Mac Chief Economist Sam Khater said in a statement Thursday. “However, given sustained economic growth and continued inflation, mortgage rates boomeranged and are inching up toward 7%.”

Freddie Mac noted 30-year, fixed-rate loans averaged 3.76% and 15-year loans averaged 3.01% at the same point of 2022. “Now that rates are moving up, affordability is hindered and making it difficult for potential buyers to act, particularly for repeat buyers with existing mortgages at less than half of current rates,” Khater said.

Annual inflation remains near 40-year highs while declining in recent months to 6.4% in January. The Federal Reserve continues to raise its key lending rate in efforts to bring inflation closer to 2%, sparking rate hikes in many types of consumer and business loans.

It comes as the gap widened in the home ownership rate between Blacks and whites in the United States.

CEO Departures Increase

CEO departures at U.S. companies totaled 112 in January, up 12% from the prior month but declining 10% from a year earlier, outplacement firm Challenger, Gray & Christmas reported this week. January’s total was the highest for a single month since 150 CEOs left their posts in May 2022.

It comes as "companies assess their previous fiscal year and make plans for the future,” Senior Vice President Andrew Challenger said in a statement Feb. 28. Since the company began tracking CEO departures in 2002, January has averaged 116 exits, with September placing second with an average of 110.

The company said hospitals led all industries in January with 23 CEO departures, followed by the government and nonprofit category at 18 and technology at 17. This was the highest exit total for hospitals since the 24 departures of August 2018.

“Hospitals and hospital systems have undergone incredible challenges over the last three years as the pandemic raged, burned out health care workers and pushed resources to the limits,” Challenger said, noting some of those CEOs were likely burned out themselves.

Most of January’s total exits, 35, were due to retirements, with another 16 stepping into other executive board or C-suite level roles.

Jobless Claims Edge Lower

Initial claims for unemployment insurance remained historically low in a generally strong jobs market, with the 190,000 for the week ended Feb. 25 marking a decline of 2,000 from the prior week, the Labor Department reported Thursday.

The four-week moving average for initial claims was 193,000, up 1,750 from the prior week.

Continuing claims in all programs, tracked on a more delayed basis, totaled about 1.9 million for the week ended Feb. 11, down 20,276 from the prior week and about equal to the figure for the comparable week of 2022.

Initial claims have stayed below weekly pre-pandemic 2019 averages so far in 2023, even amid a wave of mass layoffs announced primarily in the technology industry. Many other industries are still struggling to fill vacant positions, with the national unemployment rate near a 50-year low of 3.4% as of January.

Source: www.CoStar.com