Housing Snapshot - February 14, 2005 - 2/14/2005 - Mortgage Loan Refinance Debt Equity

Housing Snapshot - February 14, 2005

Mortgage interest rates continued to nudge downward last week despite the Federal Reserve's ongoing efforts to tighten its monetary policy. Freddie Mac Chief Economist Frank Nothaft credited weaker-than-expected employment figures in January for the decline, and he noted that the rate on one-year adjustable rate mortgages last week fell for the first time in five weeks. "According to Freddie Mac's weekly survey, interest rates on 30-year, fixed-rate mortgages have not risen above 6% in at least six months, which has helped to keep the housing market bustling. As a matter of fact, we are forecasting that long-term mortgage rates will average only about 6% for the year," Nothaft said. The biggest news for the nation's economy last week came from the Commerce Department, which announced a record $616.7 billion U.S. trade deficit for 2004, a 24% leap over the prior year. As a share of the Gross Domestic Product, the trade deficit rose from 4.5% in 2003 to 5.3% last year. The figure for December, however, showed some decline. Lumber prices continued to move forward aggressively last week, though it was not clear how much longer the upward trend will continue. The cost of framing lumber rose from $404 per 1,000 board feet to $422 last week, according to Random Lengths. The panel composite price, which includes plywood and oriented strand board, rose from $424 per 1,000 square feet to $455.