Mortgage rates fall to record lows this year, but challenges remain

Mortgage rates are continuing to head downward as the realities of the coronavirus pandemic and the upcoming presidential election puts pressure on the market.

The 30-year fixed-rate averaged 2.8% for the week ending Oct. 22. Falling below the record set just last week. The new record stands about a full point below what the rates were a year ago.

This was the 11th week which mortgage rates set a new low this year alone. On average, rates have fallen to new lows once every four years. This year we are setting new record lows every 4 weeks.

The 15-year fixed-rate mortgage meanwhile decreased to an average of 2.33%.

This downward trend means that more homeowners, even owners who bought last year, could save money by refinancing

Loan qualifications have tightened, inventory is low, so it’s unclear how much the low rates are helping the housing market. But mostly, home prices have increased across the country.

Where rates go moving forward remain unclear. Generally, mortgage rates track the direction of long-term bonds, usually the 10-year Treasury, but even that relationship has weakened over the course of the crisis.

The low cost of borrowing has opened up opportunity for people to save money. This money could be used to increase savings for retirement, education costs, childcare costs, and living costs. It’s especially important right now to review your plan and leverage any opportunity this trend has created.


Apple and Tesla shares surge after stock splits

Apple jumped over 4% and Tesla shot up over 10%, bringing the car maker’s market cap to nearly half-a-trillion dollars.

Tesla split its stock 5-for-1 and Apple split its stock 4-for1, both companies stated they are aiming to make their stock more affordable to individual investors.

Many brokerage firms have introduced “fractional shares” which lets investors own less than a full share. This benefit has made stock splits less common than in the past. Only 3 S&P500 members have announced splits in 2020.

The success of splits for both Apple and Tesla could make this a trend for other companies whose stocks have increased to exorbitant levels.

Apple and Tesla have frequently been the most traded stock in recent weeks with customers overwhelmingly buying.

Tesla’s stock has surged over 70% since its split was announced. Apple’s price has jumped over 30 percent since it was announced in late July. Apple most recent quarterly report also aided in the jump in price.

Apple’s recent split was the first since 2014 and its 5thoverall since the stock went public in 1980. Apple’s market capitalization has increased to over $2 trillion and it recently became the most valuable publicly listed company in the world.

Tesla’s stock has jumped over 500% this year, while most of the automobile sector has gone in reverse. While Apple and Tesla have done well that isn’t the case for the airlines.


American Airlines to cut 19,000 jobs when federal aid expires in October


  • American Airlines is cutting nearly 20,000 employees in October
  • The Airline expects 4th quarter to be down 50% than last year at the same time
  • Airlines are asking for an extension of federal payroll to help avoid furloughs

American Airlines will lay off 19,000 employees in October after the federal payroll aid stops. The pandemic has caused serious declines in travels and this isn’t expected to improve any time soon.

American Airlines who employees 140,000 people in exchange for receiving federal aid is prohibited in laying off workers until September 30. The federal government was hoping by October things would recover quickly enough to avoid massive layoffs. However, travelers are still suppressed at home with the lingering pandemic. American Airlines said estimated travel in the 4th quarter is to be 50% off 2019 4Q levels. They are also experiencing a 75% drop in international travel.

The airline is expecting to have 40,000 fewer employees than they had in March. These layoffs include union workers, flight attendants, pilots, mechanics, and management jobs.

Delta is also experiencing large deficits and announced that it plans to lay off almost 2,000 pilots unless it renegotiates its agreement with the union.

Southwest Airlines said it doesn’t expect to have any layoffs in 2020 because more than a quarter of its workforce signed up for voluntary leave or a buyout.

The extension of federal aids could provide the needed relief for the airlines and help prevent massive layoffs.

More than 12,500 people have opted to leave American permanently, while another 11,000 will be on leave in October.

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