Friday Economic Snapshot: Mortgage delinquencies lowest since 2008
Snow has begun blanketing parts of the north, Twitter’s gone public, we’ve survived another election and economic news is in a soothing lull before holiday sales and consumer spending begin to dominate the story for the remainder of 2013.
The stock market has been volatile this week — reaching a record high on Thursday before retreating — but the Dow Jones Industrial Average is on course to end the week close to where it started. Aside from the market action, sluggish economic growth has resumed and appears set to continue marching along.
From the Mortgage Bankers Association comes good news that overall delinquency and foreclosure rates continue to plummet. According to this week’s report, “The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 6.41 percent of all loans outstanding at the end of the third quarter of 2013, the lowest level since the second quarter of 2008.”
The rate of foreclosures looks nearly as good, with the percentage of loans in foreclosure at 3.08 percent, down 25 basis points from the previous quarter. This is the lowest foreclosure inventory rate since 2008. Time to break out those no-money-down loans!
More of a mixed impact, the advance report of the country’s Q3 GDP report from the Bureau of Economic Analysis is forecasting quarterly growth of 2.8 percent, which is above expectations but tempered by a few details that sour the punch. Inventories have edged higher, consumer spending has softened and “the drag from Federal government spending is ongoing.”
From the report: “The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures, private inventory investment, exports, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.”
This week’s data from the Department of Labor shows the advance figure for seasonally adjusted unemployment claims dropped 9,000 to 336,000. This welcome decline — likely impacted by the service sector gearing up for the holidays — shows the four-week moving average at 348,250, a decrease of 9,250 from the previous week’s average of 357,500. The previous week’s figure was surprising for the jump in unemployment claims, so it’s positive to see the rest of the year’s trend resuming.
And what about the human impact of the shutdown? “Initial claims for UI benefits filed by former Federal civilian employees totaled 4,011 in the week ending October 26, a decrease of 10,412 from the prior week. There were 2,433 initial claims filed by newly discharged veterans, an increase of 279 from the preceding week. There were 27,834 former Federal civilian employees claiming UI benefits for the week ending October 19, a decrease of 49,717 from the previous week. Newly discharged veterans claiming benefits totaled 31,841, a decrease of 265 from the prior week.”