Economic update for the week ending August 29, 2020

Stocks up for a fifth straight week – Stock markets rallied on vaccine trial results, and testimony by Federal Reserve Chairman Jerome Powell. Chairman Powell committed to leave the Fed’s interest rates near zero percent even if inflation began to exceed the target 2% annual rate. The S&P 500, and the NASDAQ closed at record highs again this week. The DOW is also rapidly approaching its record high set in February. The Dow Jones Industrial Average closed the week at 28,653.87, up 2.6% from 27,930.33 last week. It’s down 0.4% year-to-date. The S&P 500 closed the week at 3,508.01, up 3.3% from 3,397.16 last week. It’s up 8.6% year-to-date. The NASDAQ closed the week at 11,695.63, up 3.4% from 11,311.81 last week. It’s up 30.3%  year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 0.74%, up from 0.64% last week. The 30-year treasury bond yield ended the week at 1.52%, up from 1.35% last week.

Mortgage rates – The August 27, 2020 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.91%, down from 2.99% last week. The 15-year fixed was 2.46%, down from 2.54% last week. The 5-year ARM was 2.91%, unchanged  from 2.91% last week.

Additional refinance fee postponed until December 1, 2020 – Two weeks ago the Federal Housing Finance Agency announced that they were enacting an additional fee of 1/2% on all refinance loans funded on or after September 1, 2020. That additional fee would be charged on all government sponsored loans which include, Fannie Mae, Freddie Mac, FHA and VA loans. The reason for this fee was to offset loses caused by the coronavirus crisis, which include forbearance, and delayed foreclosures. The Mortgage Bankers Association, and the National Association of Realtors are among the many groups fighting against the implementation of this fee.