Economist's Commentary: April 17, 2008

Quick Take on the Economy: April 17, 2008

By Ken Fears, Manager, Regional Economics

Claims for unemployment insurance increased by 17,000 to 372,000 this week.
Consequently, the 4-week moving average eased slightly from 376,000 to 376,750.
The 4-week average for claims is roughly 57,000 claims higher than it was at the same period in 2007.

The average 30-year fixed rate mortgage was unchanged at 5.88% this week, while fees and points on this vehicle remained steady at 0.4%.
This rate is well below the 6.17% measure recorded at this same time in 2007. Fees and points on the 1-year ARM eased 10 basis points to 0.5%, while the average rate slipped 8 basis points to 5.10%.

Claims have risen, but remain relatively low by historical standards. This pattern indicates that the economy is neither growing nor collapsing.
Low claims suggest that there will be less stress on owners to maintain their monthly payments. Resilient employment also means that with time and confidence, those persons with stable employment positions will become prospective home buyers. This pattern will help to deepen demand and buoy up prices in the long-term.
Historically low, long term mortgage rates are boosting affordability to levels that have not been seen in years. Combined with a large selection of inventory and pricing in buyers' favor, the fundamentals are lining up for buyers. Confidence is the key.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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