Economic Growth, Pending Home Sales, Mortgage Rates
October 29, 2015
Thursday – October 29
Economic growth in the third quarter of 2015 slowed across the nation, but it was mainly due to a big decline in inventories, particularly goods that are being exported. The Bureau of Economic Analysis reported that the first reading on Gross Domestic Product (GDP) in the third quarter rose 1.5%, well below the 3.9% recorded in the second quarter. GDP measures the value of goods and services produced by the nation’s economy. Many of the component’s within the report were positive, with consumer spending a standout up 3.2% after a big gain in the second quarter.
The National Association of REALTORS® reported on Thursday that Pending Home Sales fell 2.3% in September from August and are just 3% higher than a year ago. The -2.3% was the second straight monthly decline and the second lowest number for 2015. The Northeast experienced the biggest drop, down 4%, followed by a 2.5% drop in the Midwest, -2.6% in the South and flat in the West. The Pending Home Sales Index is based on signed contracts for existing single-family homes, condos and co-ops.
Mortgage rates continued to hover just above historic lows this week. Government sponsored entity Freddie Mac reported that the 30-year fixed conventional mortgage rate fell to 3.76% this week when paying 0.6 in points and fees. Mortgage rates are below last year’s levels of near 4% as inflation runs below the Federal Reserve’s target range and as global economies continue to run slow.