Placed in Market Update
Mortgage rates decreased slightly for the week ending April 27, resulting in record low levels. The overall average rate for 30-year fixed-rate mortgages dropped by .02%, to 4.17%. The 15-year fixed-rate decreased to an average 3.41% (a .03% dip from the previous week). FHA-backed 30-year mortgages decreased slightly to 3.80% (.01% drop) and 5/1 Hybrid ARMs were at an average of 2.97%, a .02% reduction.
During last week’s Federal Reserve meeting, policymakers again made no major changes; keeping the Federal Funds rate at near zero. While the timing of a shift in that critical rate has been widely discussed, it still seems likely that no movement is expected until at least 2014. At a post meeting news conference, Chairman Ben Bernanke noted that if necessary, the Fed would take an active stance to lower unemployment but not at the cost of high inflation.
The recently released initial report of the 2012 Gross Domestic Product indicates the economy grew at a mild 2.2% rate in the first quarter of this year. That is down from a 3% rate in the last quarter of 2011. One notable stat: consumer spending, which accounts for almost 70% of the economy, increased to an annual rate of 2.9% in the first quarter. Forecasters believe that the overall growth rate will eventually be at 3% for this year. The Fed has predicted that the economy will grow between 2.4% and 2.9% in 2012. Not a booming economy, but not slipping into recession either.