The country's economic engine seems to be running in reverse as more expensive borrowing spurs home sales, and an uptick in borrowing sends mortgage rates back down.
The recent surge in mortgage rates, by all rational calculations, should have made America's already troubled housing market worse off. Instead, higher borrowing costs modestly boosted homes sales in November.
Before slipping down slightly this week, mortgage rates had risen for several weeks in a row as yields on 10-year Treasury bills, which largely influence the cost of mortgages, rose. The average rate for a 30-year fixed loan increased to 4.83% in the week ending December 16 from 4.61% the previous week, marking a fourth week of increases, according to Freddie Mac (FRE). The rate increases were some of the highest seen since June of this year.
Intuitively, it would make sense that higher borrowing costs would discourage potential homebuyers. And vice versa. But quite the opposite has happened. More
The erstwhile presidential candidate and soon to be head of Congressional oversight of the Federal Reserve talks gold, jobs and the presidency with Fortune.
If there's anything to be said about U.S. Congressman Ron Paul, he sure is persistent. And lately, that inner flame that's helped him gain the reputation for sometimes being the "G.O.P. loner" appears to be paying off.
The soft-spoken obstetrician has represented the 14th District of Texas on MORENin-Hai Tseng, Writer - Dec 14, 2010 11:48 AM ET
On Sunday, newspapers published discoveries from hundreds of thousands of diplomatic cables disclosed by Wikileaks. But the palace intrigue isn't only for the diplomatic set. It's also for the business-obsessed. There are plenty of gossipy comments about the people who control business, trade, and currency across the world. Fortune is keeping its eye on those memos so you don't have to. Check back regularly to see what we dredge MOREDec 3, 2010 2:15 PM ET
Is the weak renminbi really the main problem? One analyst thinks China's health care spending and lack of a consumer-driven economy are to blame for U.S. trade woes.
In the world of politics, China's monetary policy has proven to be an easy target to attach blame to for everything from the trade deficit to the weak dollar. But in the world of economics, the topic is much more complex than America's MORENin-Hai Tseng, Writer - Nov 5, 2010 12:39 PM ET
The Fed struggles to paint a rosy picture, but research firm Hedgeye sees what can only be called inflation. That points to a weakening of the U.S. dollar and one inevitable conclusion.
By Daryl G. Jones, contributor, managing director Hedgeye
Last Friday I had the opportunity to appear on The Kudlow Report to discuss gold and inflation. It was a spirited discussion, and while Larry Kudlow is largely in our camp that MORESep 23, 2010 11:08 AM ET
President Obama's handpicked National Economic Council chair, Larry Summers, is on the way out the door. The last person to man NEC directorship explains what goes into the job and the qualities Obama will need to find in the next director.
By Keith Hennessey, contributor
A close advisor to President Obama calls you. "Larry Summers will soon leave his job as Assistant to the President for Economic Policy and Director of the MORESep 22, 2010 7:24 PM ET
The Great Recession might have officially ended well over a year ago, but consumers sure haven't been acting like it.
Officials this week might have declared an end to the longest U.S. recession since the Great Depression, but consumer and retail trends indicate anything but an end of slumping sales in housing market-related industries. The recession, which the National Bureau of Economic Research says actually ended in June 2009, lasted 18 MORENin-Hai Tseng, Writer - Sep 21, 2010 1:55 PM ET
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