Federal Reserve Chairman Ben S. Bernanke has acknowledged that it is hard to tell whether the problem is more reflective of banks shying away from making loans to small businesses or a lack of demand from those companies.
Applications soar for new mortgages
Applications for home loans rose last week as consumers raced to refinance at the lowest rates in decades.
The Mortgage Bankers Association said Wednesday that overall applications increased nearly 7 percent from a week earlier. While they have been increasing in recent weeks, they remain below early 2009 levels.
Applications to refinance home loans were up 9 percent to the highest level since May 2009, but mortgages taken out to purchase homes fell 2 percent.
Those applications have fallen in eight out of the past nine weeks, after government tax credits that spurred home sales ended on April 30. Applications were 35 percent below last year’s levels.
The average rate for a 30-year fixed-rate loan sank to 4.58 percent last week, according to Freddie Mac. That was the lowest since the mortgage company began keeping records in 1971.
Mortgage rates have fallen since mid-April. Investors, nervous about Europe’s debt crisis and the global economy, have shifted money into safe Treasury bonds. That has caused the yields on those bonds to fall. Long-term fixed mortgage rates tend to track those yields.
Mrs. Obama braves heat, walks to Treasury
First lady Michelle Obama paid a visit on the neighbors Wednesday, but scorching temperatures forced the party inside.
Treasury had planned to hold the event outdoors, but with temperatures near 100 degrees, Mrs. Obama’s appearance was moved inside to Treasury’s ornate and air-conditioned Cash Room.
Despite the heat, Mrs. Obama enjoyed a rare pleasure given the heavy security that surrounds a president’s family. She got to walk across the street.