Latest news with #economicSlowdown
CNET
08-07-2025
- Business
- CNET
Mortgage Refinance Rates Move Higher: Mortgage Refinance Rates on July 8, 2025
So far this year, average mortgage rates have stayed stubbornly high, bouncing between 6.5% and 7%, as financial markets weigh the risks of both higher inflation and an economic slowdown. Most homeowners, unable to save money by refinancing, are holding out for bigger rate drops. "If rates fall below 6%, we could see a big jump in refinance activity," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. Yet economists and housing market experts aren't expecting a dramatic drop-off in rates in the immediate future. Mortgage refinance rates fluctuate daily based on a range of economic and political factors. For more insights on where rates might be headed, check out our weekly mortgage rate forecast. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. Refinance rate news Early-year projections for mortgage refinance rates were cautiously optimistic. Experts outlined a gradual improvement in housing affordability driven by easing inflation and a series of Federal Reserve rate cuts. However, after cutting interest rates three times last year, the Fed has held rates steady in 2025 to observe how President Trump's policies on trade, immigration and government spending will affect the economy. The central bank is expected to resume cutting rates as early as September, but this will not immediately result in lower mortgage rates. While the Fed's policy decisions guide borrowing costs across the economy, they don't have a 1:1 relationship with mortgage rates, which are set in the bond market. As of now, the Fed is expected to make two 0.25% rate reductions this year. If inflation increases due to tariffs, policymakers may hold off on easing borrowing costs until later, which would keep upward pressure on mortgage refinance rates. Where refinance rates are headed in 2025 Mortgage refinance rates are expected to inch down over the coming months, but are unlikely to drop below 6.5% without multiple interest rate cuts and weaker economic data. Overall, it's unlikely we'll see another refinancing boom like the one in 2020-21 when mortgage rates were exceptionally low around 3%. Nevertheless, refinancing might be beneficial for other reasons, like changing the type of home loan, term length or taking someone off the mortgage. What does it mean to refinance? When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you'll tap into your equity with a new loan that's bigger than your existing mortgage balance, allowing you to pocket the difference in cash. Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it's the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly. But refinancing your mortgage isn't free. Since you're taking out a whole new home loan, you'll need to pay another set of closing costs. If you fall into that pool of homeowners who purchased property when rates were high, consider reaching out to your lender and running the numbers to see whether a mortgage refinance makes sense for your budget, said Logan Mohtashami, lead analyst at HousingWire. How to find the best refinance rates The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. 30-year fixed-rate refinance The average rate for a 30-year fixed refinance loan is currently 6.80%, an increase of 0 basis point over this time last week. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term. 15-year fixed-rate refinance The current average interest rate for 15-year refinances is 6.14%, an increase of 1 basis points over last week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you'll save more money over time because you're paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run. 10-year fixed-rate refinance The average rate for a 10-year fixed refinance loan is currently 6.17%, an increase of 7 basis points compared to one week ago. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment. To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don't forget to speak with multiple lenders and shop around. When to consider a mortgage refinance Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance: To get a lower interest rate: If you can secure a rate that's at least 1% lower than the one on your current mortgage, it could make sense to refinance. If you can secure a rate that's at least 1% lower than the one on your current mortgage, it could make sense to refinance. To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage. If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage. To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity. If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity. To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run. Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run. To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense. If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense. To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.
CNA
03-07-2025
- Business
- CNA
Wealth Wise - Global economy: Rougher days ahead?
Could we be in for a bumpier roller coaster, as the world braces for possible widespread slowdown in the global economy? Lance Alexander learns more from Heng Koon How, Head of Markets Strategy, UOB.
Yahoo
28-06-2025
- Business
- Yahoo
Consumers saw a double whammy of bad news in May, pulling back on spending as inflation heated up
Consumer spending in May fell for the first time this year, the Commerce Department reported Friday, indicating that weakening consumer confidence is starting to affect the checkout line. Meanwhile, inflation ticked up and is projected to rise even more due to tariffs, economists say, predicting a 'summer slowdown.' For the first time this year, consumers pulled back on spending as the bad mood that's been pervasive since tariffs hit caught up with retail data. Overall spending in May fell 0.1% from the prior month and incomes fell 0.4%, the Commerce Department reported Friday. Coming on the heels of a report that first-quarter GDP shrank more than expected, the data show a rapidly downshifting economy. 'Personal consumption expenditures are weak and continue to weaken,' Eugenio Aleman, chief economist at Raymond James, told Fortune. 'We knew that consumer demand has been on the weak side, but yesterday we had the revision to the first-quarter GDP, which reaffirmed that consumption wasn't that strong. Today's number just confirmed that this wasn't a one-off.' Both spending and income figures were distorted by one-time changes. Spending on cars plunged, pulling down overall spending, because Americans had moved more quickly to buy vehicles in the spring to get ahead of tariffs. But spending on airfares, meals, and hotels all fell last month—signs of underlying consumer pressure rather than mere timing shifts. Spending on services overall rose just 0.1% in May, the lowest one-month increase in four and a half years. 'Because consumers are not in a strong enough shape to handle those (higher prices), they are spending less on recreation, travel, hotels, that type of thing,' said Luke Tilley, chief economist at Wilmington Trust. Retail sales also dropped sharply last month, contracting 0.9%, according to a separate report released last week. Incomes also dropped after a one-time adjustment to Social Security benefits boosted payments in March and April, allowing some retirees who had worked for state and local governments to get higher Social Security payments. Inflation heated up modestly, with prices rising at a 2.3% annual rate in May, compared with 2.1% in April. Core prices, which exclude volatile food and energy costs, increased 2.7% from a year earlier, up from April's 2.6% rate. In the first three months of this year, consumer spending rose just 0.5% and has been sluggish in the first two months of the second quarter. Most economists think May's figures signal a dramatic downshift to come. 'The US economy is poised for a summer slowdown,' EY economists wrote. 'Both consumer spending and business investment are expected to decelerate significantly.' In recent years, consumers have been able to keep spending more thanks to real income growth and a boost to some government benefits. 'But these two supports have now mostly faded, and the real income picture is about to deteriorate rapidly, as tariffs drive up prices,' economist at Pantheon Macroeconomics said. With personal savings low and consumers too skittish to borrow, 'consumption is likely to slow much further, and soon,' they said. Real incomes are set to flatten this year, due partly to a weaker job market but also because prices are rising, they wrote. At the same time, the rate of inflation—2.7% annually—is significantly higher than the Federal Reserve's 2% target, making it unlikely rate cuts are coming anytime soon. 'With so many uncertainties still lingering, the Fed will likely hold off on rate cuts for the time being,' Nationwide Financial Markets Economist Oren Klachkin said. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-06-2025
- Business
- Yahoo
Consumers saw a double whammy of bad news in May, pulling back on spending as inflation heated up
Consumer spending in May fell for the first time this year, the Commerce Department reported Friday, indicating that weakening consumer confidence is starting to affect the checkout line. Meanwhile, inflation ticked up and is projected to rise even more due to tariffs, economists say, predicting a 'summer slowdown.' For the first time this year, consumers pulled back on spending as the bad mood that's been pervasive since tariffs hit caught up with retail data. Overall spending in May fell 0.1% from the prior month and incomes fell 0.4%, the Commerce Department reported Friday. Coming on the heels of a report that first-quarter GDP shrank more than expected, the data show a rapidly downshifting economy. 'Personal consumption expenditures are weak and continue to weaken,' Eugenio Aleman, chief economist at Raymond James, told Fortune. 'We knew that consumer demand has been on the weak side, but yesterday we had the revision to the first-quarter GDP, which reaffirmed that consumption wasn't that strong. Today's number just confirmed that this wasn't a one-off.' Both spending and income figures were distorted by one-time changes. Spending on cars plunged, pulling down overall spending, because Americans had moved more quickly to buy vehicles in the spring to get ahead of tariffs. But spending on airfares, meals, and hotels all fell last month—signs of underlying consumer pressure rather than mere timing shifts. Spending on services overall rose just 0.1% in May, the lowest one-month increase in four and a half years. 'Because consumers are not in a strong enough shape to handle those (higher prices), they are spending less on recreation, travel, hotels, that type of thing,' said Luke Tilley, chief economist at Wilmington Trust. Retail sales also dropped sharply last month, contracting 0.9%, according to a separate report released last week. Incomes also dropped after a one-time adjustment to Social Security benefits boosted payments in March and April, allowing some retirees who had worked for state and local governments to get higher Social Security payments. Inflation heated up modestly, with prices rising at a 2.3% annual rate in May, compared with 2.1% in April. Core prices, which exclude volatile food and energy costs, increased 2.7% from a year earlier, up from April's 2.6% rate. In the first three months of this year, consumer spending rose just 0.5% and has been sluggish in the first two months of the second quarter. Most economists think May's figures signal a dramatic downshift to come. 'The US economy is poised for a summer slowdown,' EY economists wrote. 'Both consumer spending and business investment are expected to decelerate significantly.' In recent years, consumers have been able to keep spending more thanks to real income growth and a boost to some government benefits. 'But these two supports have now mostly faded, and the real income picture is about to deteriorate rapidly, as tariffs drive up prices,' economist at Pantheon Macroeconomics said. With personal savings low and consumers too skittish to borrow, 'consumption is likely to slow much further, and soon,' they said. Real incomes are set to flatten this year, due partly to a weaker job market but also because prices are rising, they wrote. At the same time, the rate of inflation—2.7% annually—is significantly higher than the Federal Reserve's 2% target, making it unlikely rate cuts are coming anytime soon. 'With so many uncertainties still lingering, the Fed will likely hold off on rate cuts for the time being,' Nationwide Financial Markets Economist Oren Klachkin said. This story was originally featured on Sign in to access your portfolio
Associated Press
18-06-2025
- Business
- Associated Press
US unemployment ticked down, hovering at historically low levels
WASHINGTON (AP) — The number of Americans applying for unemployment benefits dipped to 245,000 last week, hovering at historically low levels, the Labor Department said Wednesday. U.S. jobless claims ticked down from 250,000 the week before. Economists had expected last week's claims to match that at 250,000. The four-week average of claims, which smooths out week-to-week volatility, rose to 245,500, the highest since August 2023. The number of Americans collecting unemployment benefits the week of June 7 slid to 1.95 million. Weekly unemployment claim are a proxy for layoffs and mostly have stayed within a healthy band of 200,000 to 250,000 since the economy recovered from a brief but painful COVID-19 recession in 2020, which temporarily wiped out millions of jobs. In recent weeks, however, claims have stayed at the high end of range, adding to evidence that U.S. job market is decelerating after years of strong hiring. So far this year, employers are adding a decent but far from spectacular 124,000 jobs a month, down from an average 168,000 last year and an average of nearly 400,000 from 2021 through 2023. The hiring slowdown is partly the drawn-out result of 11 interest rate hikes by the Federal Reserve in 2022 and 2023. But Trump's aggressive and often-erratic trade policies — including 10% taxes on imports from almost every country on earth — are also weighing on the economy, paralyzing businesses and worrying consumers who fear they'll mean higher prices. Carl Weinberg of High Frequency Economics is worried that claims remain elevated compared with recent years, when employment has remained very low by historical standards. 'We believe firms have been 'hoarding' workers to ensure that they don't lay off skilled and trained workers by mistake, especially with the labor market still very close to full employment,' Weinberg wrote. 'With uncertainty still high ... companies have remained hesitant about layoffs. That may be changing.'' The Fed, satisfied that an inflation was coming down, cut rates three times last year. But the central bank has turned cautious in 2025, worried that Trump's tariffs will rekindle inflationary pressures. The Fed is expected to leave rates unchanged as it wraps up a two-day meeting Wednesday.
