Gross Domestic Product, Pending Home Sales in August Fell, Mortgage Rates declined in latest week
September 29, 2016
Thursday – September 29
The final reading for second quarter 2016 Gross Domestic Product rose by a dismal 1.4% from the 1.1% that was reported previously. The 1.4% compares to 2.6% in the comparable period in 2015. ThE 2.4% is up from the 0.8% in the first quarter of this year, but below the 2% annual growth rate averaged since the recession ended in mid-2009. Within the report it showed that business investment improved, while consumer spending rose 4.3%.
The National Association of REALTORS® reported on Thursday that Pending Home Sales in August fell 2.4% from July to their lowest level since January. The -2.4% was below the 1% expected as sales cooled in August for the third time in four months. Across the nation, sales rose 1.3% in the Northeast, decreased 0.9% in the Midwest, were down 3.2% in the South and were lower by 5.3% in the West. Pending Home Sales measures housing contract activity based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes.
Mortgage rates declined in the latest week as they hover just above all-time lows, falling to a 10-week low. The slight decrease came after the U.S. Federal Reserve Bank decided not to raise interest rates at the September 21 meeting. The 30-year fixed mortgage rate fell to 3.42% this week from 3.48% with 0.5 in points and fees. Last year in the same week, the rate was 3.85%. Low mortgage rates have fueled the sector in the past eight years after the housing bubble imploded back in 2008.