Strong U.S. GDP Estimates and Employment Figures – Mortgage Loan Applications Continue to Decline

The U.S. Department of Commerce released its third estimate for the fourth-quarter gross domestic product (GDP) on Wednesday. According to this, the U.S. economy grew by 6.9%, which is in line with the result of the first estimate.

Previously, the U.S. economy grew 6.3% in Q1 21 and 6.7% in Q2 before slowing to 2.3% in Q3 as raw material shortages in the manufacturing sector affected the supply chain and led to a decline in auto sales and consumer spending.

For 2021 as a whole, the U.S. economy will grow by 5.7%, the fastest pace since 1984, after contracting by 3.4% in 2020 – the sharpest decline since 1946, which was caused by the COVID-19 epidemic.

According to the Mortgage Bankers Association (MBA) of the United States, the number of mortgage applicants fell by 6.8% last week. This is due to rising mortgage rates.

The number of refinancing applications fell by 15% last week and by 60% compared to the same period last year.

The number of applicants for home equity loans increased by 1% last week and fell by 10% compared to the same period last year.

The average interest rate on 30-year fixed-rate mortgages for loans up to $647,200 rose to 4.80% from 4.50% the previous week.

In addition, Automatic Data Processing, Inc. (ADP) and Moody’s Analytics reported that private-sector jobs increased by 455,000 in March.

ADP revised February’s payroll increase to 486,000 from the previously reported 475,000 increase.

The service sector employed 377,000 more people in March, while manufacturing provided 78,000 jobs.

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