Mortgage Trends This Week: Feb. 1

Here’s a fact that could ruin your Monday morning (unless you’re a banker).

Peter Morici, former chief economist at the U.S. International Trade Commission, points out that the U.S. gross domestic product increased by a weak $176 billion in the second half of 2009 (after adjusting for business inventory bookkeeping procedures). During the same period, Morici points out, U.S. banks paid out nearly $150 billion — and earned roughly twice that amount of money in profits.

As Morici says in a RealClearMarkets.com post, “It is easy to see who is benefiting from (President) Obama's growth policies, and why most Americans feel a bit poorer each day.”

Maybe that’s why so few financial pundits — and American families — made a big deal out of the news that the GDP grew by 5.7% in the last quarter of 2009. Discounting the inventory liquidation that took place during the quarter as panicked companies throttled down on inventories in the teeth of a big consumer recession, real GDP was closer to 2.2% for the quarter. In addition, business investment is off by 14.6% from a year ago at this time, and American workers are taking a huge hit in their paychecks. According to the U.S. Labor Department, wages and benefits rose by just 1.5% in 2009 — the lowest number ever recorded.

Clearly, the U.S. economy remains in a world of hurt, and that pain is reflected in the downward trend in mortgage rates last week.

Here are the numbers, as measured by the BankingMyWay Weekly Mortgage Rate Tracker:

Description            This Week        Last Week

One-Year ARM          3.95%                4.31%

Three-Year ARM        4.03%               4.46%

Five-Year ARM          4.18%               4.41%

15-Year Mortgage    4.5%                 4.57%

30-Year Mortgage    5.09%               5.15%