(PatrioticPost.com)- As the chaos Biden unleashed on Afghanistan continues into its second week, the economic chaos he unleashed on the United States marches on. According to the Mortgage Bankers Association (MBA), mortgage applications – especially for refinancing — declined during the week of August 9 fueled in large part by mortgage rates rising back over 3 percent for the first time in about a month.
The MBA reported on Wednesday that its average contract interest rate on 30-year mortgages inched up to 3.06% from the previous week’s average of 2.99%. Meanwhile, the seasonally-adjusted market index tracking mortgage applications fell 3.9% from just one week earlier – this reflects a 5.3% decrease in applications to refinance existing home loans.
Mortgage rates hit record lows last year, below 2.9%. But mortgage rates began to climb in the first part of 2021 and peaked in the spring. These rates had started drifting down again in large part due to extraordinary stimulus measures put in place by the Federal Reserve which aimed to help the economy rebound from the economic devastation caused by the US pandemic response. But rates ticked higher after the July jobs numbers showed a surge in hiring.
Meanwhile, according to the University of Michigan, consumer confidence has plunged more than 13 percent in the last month to its lowest level in a decade, fueled in large part by rising inflation and the never-ending COVID pandemic restrictions.
U of M’s “consumer sentiment index” fell from 81.2 to 70.2 – the lowest level since 2011, and the largest drop since April 2020 during the early days of COVID lockdowns.
This loss of consumer confidence covered all aspects of the US economy – from personal finances to future economic outlook, including inflation and unemployment.
According to survey director Richard Curtin, there is little doubt that the recent surge in COVID cases due to the Delta variant has a lot to do with consumers believing that the economic outlook “will be diminished over the next several months.” Curtin believes that some of the drop in consumer confidence is an emotional response from those who had been hopeful that the economic impact from the pandemic response was behind us.
The persistent inflation is also cause for concern among consumers as the assurances that inflation was simply “transitory” are looking not to be the case.