Mortgage rates drop as good news continues

January 22, 2015

The current state of the world economy finds Americans increasingly on the desirable side of the haves and have-nots.

With consumer sentiment and market indices steadily rising while mortgage rates drop, it is hard not to feel good about the present state of the U.S. economy. As this Reuters graphic shows, the rate for a 30-year, fixed mortgage fell to 3.8 percent this week, its lowest point since May, 2013. As the result of falling rates, according to the Mortgage Bankers Association, for the week ending Jan. 16, the seasonally adjusted index of mortgage applications rose 14.2 percent. This index includes both home purchases and refinancing, the latter of which jumped 22.3 percent, allowing many homeowners to save on payments and spend money elsewhere.

Meanwhile, across the pond, the over half a million Poles who have mortgages in Swiss francs rather than zlotys saw their payments jump last week as the result of the Swiss National Bank’s moves to mitigate the strength of its currency, and today the European Central Bank announced a plan to inject 60 billion euros per month into the euro zone economy after months of negative interest rates filed to stimulate Europe’s economies.

In a column about “the deflationary vortex” last week, The New York Times’s Paul Krugman warned against complacency in the face of troubles abroad, pointing out that recent the run of good news doesn’t make the U.S. immune to the stagnation flu. Still, it’s nice to bask in this surge in positive news, at least for now.

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