On The Money - Mortgage rates at highest level since 2006




  • In Business
  • 2022-10-05 22:31:07Z
  • By The Hill
 

Mortgage rates are climbing and Americans aren't buying. We'll also look at OPEC's decision to cut oil production, as well as the possible reasons behind this week's stock market rebound.

But first, check out President Biden's most recent hot mic moment.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we're Sylvan Lane and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

US mortgage rates hit 16-year high

Mortgage rates reached a 16-year high last week, further dampening demand from home buyers, according to data from the Mortgage Bankers Association (MBA) released Wednesday.

The 30-year fixed mortgage rate rose to 6.75 percent in the final week of September, the highest figure since 2006. Mortgage rates have climbed 1.3 percentage points over seven straight weeks of increases.

  • Mortgage applications fell 14.2 percent from the week prior, according to the MBA. 

  • Rates have more than doubled over the last year, making monthly payments far more expensive.  

  • That's going to drive down housing prices further in the coming months, analysts say.

Karl has more here.

COSTLY CUT

OPEC+ announces 2 million-barrel production cut

The Organization of the Petroleum Exporting Countries (OPEC) and its oil-exporting allies announced a 2 million barrel per day cut in oil production Wednesday, bucking months of pressure from Washington to increase production and potentially spiking gas prices again.

The coalition, which includes the 13 OPEC nations and 11 non-members including Russia, made the announcement at its Vienna meeting, the first in-person summit since the beginning of the COVID-19 pandemic.

  • The announced cut is roughly equivalent to 2 percent of global supplies, potentially prompting an increase in gas prices just weeks before the midterms.

  • The move comes after President Biden visited Saudi Arabia in July to directly appeal to its leaders to increase oil production.

Zack Budryk has the details here.

Read more: Democrats excoriate Saudis over OPEC+ decision

MARKET MYSTERY

Here's the reason behind this week's stock turnaround

Stock markets tried their best Wednesday to maintain a two-day rally that saw some of the biggest single-day gains since April 2020, when markets initially rebounded from shutdowns in the early days of the coronavirus pandemic.

The rally earlier this week, which saw the Dow rise more than 1,500 points, was due in large part to a report from the Labor Department that high levels of employment within the U.S. economy may be declining - a sign that the Federal Reserve could potentially discontinue hiking interest rates to battle record inflation.

  • But additional employment data released Wednesday indicated that the strong job market may not in fact be leveling off.  

  • Payroll services firm ADP reported Wednesday that U.S. companies added 208,000 jobs in September, beating economists' expectations by 4 percent.

Tobias Burns has more here.

LOW EXPECTATIONS

World Trade Organization slashes forecast for global imports, exports

Global trade will lose momentum next year amid rising interest rates, a shrinking energy supply and high prices, according to the World Trade Organization (WTO).

The WTO estimates that global merchandise trade will grow by 1 percent next year, down sharply from its 3.4 percent forecast this spring. The organization said that trade will increase by 3.5 percent this year, up slightly from its previous 3 percent estimate, but noted that the change was mostly explained by statistical revisions.

The forecast is another indicator that the global economy is slowing down.

Karl has more here.

Good to Know

Elon Musk is proceeding with a deal to buy Twitter for $44 billion, the original purchase price agreed upon in April, amid an intense legal battle between the two sides.

Here's what we know about Musk's renewed effort to buy the social media giant just two weeks before a highly publicized trial is set to take place.

Other items we're keeping an eye on:

  • The proportion of Americans expecting to lose employment income in the next four weeks hit a record low in September, according to a new poll.

  • For Sen. Mitch McConnell (R-Ky.), killing Sen. Joe Manchin's (D-W.Va.) permitting reform bill was personal.

That's it for today. Thanks for reading and check out The Hill's Finance page for the latest news and coverage. We'll see you tomorrow.

For the latest news, weather, sports, and streaming video, head to The Hill.

COMMENTS

More Related News

ECB
ECB's Lane Confident Inflation Near Peak as More Hikes to Come

(Bloomberg) -- European Central Bank Chief Economist Philip Lane said consumer-price growth is probably near its zenith, while acknowledging that borrowing...

Dollar holds firm on hawkish Fed bets, Aussie on back foot before RBA
Dollar holds firm on hawkish Fed bets, Aussie on back foot before RBA

The U.S. dollar held firm against major peers on Tuesday, following its biggest rally in two weeks after strong services data in the United States fuelled...

U.S. broadens immigration program for Haitian migrants, citing humanitarian crisis
U.S. broadens immigration program for Haitian migrants, citing humanitarian crisis

The Biden administration cited the deteriorating humanitarian crisis in the destitute Caribbean nation, which has been beset by an outbreak of violence.

Florida
Florida's average gas prices drop and are expected to decline further

Gas prices in Florida continue to slacken amid global jitters over the demand for oil and an increase in output from U.S. oil refineries.

5 Ways To Majorly Reduce Your Credit Card Debt by the End of the Year
5 Ways To Majorly Reduce Your Credit Card Debt by the End of the Year

Credit card debt is a financial scourge, as it can rapidly spiral out of control due to high interest rates. However, sometimes it can be difficult to avoid ...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business