Mortgage rate rise continues
WASHINGTON – Fixed U.S. mortgage rates rose for the sixth straight week, putting the average rate on the 30-year loan just shy of 4 percent.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan increased to 3.98 percent. That’s up from 3.91 percent last week and the highest since April 2012. The average rate was last at 4 percent or higher in March 2012.
The rate on the 15-year loan advanced to 3.10 percent from 3.03 percent. That’s also the highest since April 2012.
Concerns that the Federal Reserve will scale back its bond purchases have pushed rates higher. Still, mortgage rates remain low by historical standards.
The Fed’s $85-billion-a-month in bond purchases have pushed down long-term interest rates. As speculation has grown that the Fed will slow those purchases, investors have driven rates up. That has decreased the value of bonds with lower yields.
Fed policymakers hold a two-day meeting next week that will be closely watched for signals that the Fed may soon slow the bond purchases.
Foreclosure completions jump
LOS ANGELES – Lenders stepped up action last month against homeowners who had fallen behind on their mortgage payments, taking possession of more homes and initiating the foreclosure countdown clock on many others.
Completed foreclosures jumped 11 percent nationally in May from the previous month, with monthly increases taking place in 33 states, foreclosure listing firm RealtyTrac Inc. said Thursday.
The monthly pickup reflects a rise in homes entering the foreclosure process last year. Many of those homes wound their way through the often lengthy process and ended up becoming bank-owned properties. Home repossessions, however, were down 29 percent from May last year, reflecting the long-term downward trend.
Banks also started the foreclosure process on more homes last month. Foreclosure starts rose 4 percent from April, but were down 33 percent versus May last year, the firm said.
Retailers report sales gains
WASHINGTON – Americans stepped up purchases at retail businesses in May, spending more on cars, home improvements and sporting goods. The gain shows consumers remain resilient despite higher taxes and could drive faster growth later this year.
The Commerce Department said Thursday that retail sales increased 0.6 percent in May from April. That’s up from a 0.1 percent gain the previous month and the fastest pace since February.
The April gain was led by a 1.8 percent jump in auto sales, the biggest increase in six months. Excluding volatile autos, gas and building supplies, core retail sales rose 0.3 percent. That’s slightly higher than the 0.2 percent April increase.
Sales increased at hardware and general merchandise stores, but fell at furniture and appliance stores.
Separately, the Labor Department said the number of Americans seeking unemployment benefits dropped 12,000 last week to a seasonally adjusted 334,000. The decline suggests steady job gains will endure.
The retail sales report is the government’s first look each month at consumer spending, which drives 70 percent of economic activity.
There are signs that spending could strengthen in the second half of the year. Consumer confidence rose to five-year high in May. And steady gains in home sales and construction are providing support for the economy even as manufacturing weakens.