GDP, Homeownership Rates, Mortgage Rates
April 28, 2016
Thursday – April 28
The Bureau of Economic Analysis reported today that first quarter 2016 Gross Domestic Product (GDP) rose by an anemic 0.5% versus the 0.9% expected and down from the 1.4% in the final quarter of 2015. It was the lowest first quarter reading since 2014. In addition, GDP showed exports fell by 2.6%. Consumer spending rose 1.8%, with much of that on utilities and health care. The GDP report had a bit of bad news for everyone. The Core Personal Consumption Expenditures inflation rate inside GDP, which excludes food and energy, rose 2.1% in the first quarter, up from the 1.3% rise in the previous quarter.
Homeownership rates fell to their third lowest on record in the first quarter of 2016, signaling deteriorating finances, higher qualifications and changing preferences since the Great Recession. The Commerce Department reported that the U.S. homeownership rate fell to 63.6 in the first quarter of 2016. Homeownership rates were the highest in the Midwest (53.9%) and the lowest in the West (58.7%). The homeownership rate for those aged 35 or younger fell to 34.2%, compared to 34.7% in the fourth quarter of 2015 and 34.6% in the first quarter of 2015.
Mortgage rates edged higher in the latest week as Bond prices fell, while yields edged higher. Freddie Mac reported that the average rate for a 30-year fixed conventional mortgage ($417,000 or less) rose to 3.66% from the previous rate of 3.59%. The rate comes with 0.6 in points and fees added on top of 3.66%. Mortgage rates continue to run just above all-time lows as the Federal Reserve continues on its quest to keep rates low to spur on the economy.