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Mortgage rates
ease for second straight week
LOS ANGELES | Mortgage rates eased again this week, though the latest pullback leaves the average rate on a 30-year home loan at close to 7%, where it’s been much of this year.
The rate fell to 6.95% from 6.99% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.69%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week, lowering the average rate to 6.17% from 6.29% last week. A year ago, it averaged 6.10%, Freddie Mac said.
“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Sam Khater, Freddie Mac’s chief economist.
Home loan rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Yields have eased recently following some economic data showing slower growth. On Thursday, a report showed inflation at the wholesale level fell from April into May. That followed a surprisingly encouraging update on inflation at the consumer level a day earlier.
Signs that the economy is cooling can drive inflation lower, which could persuade the Fed to lower its short-term interest rate from its highest level in more than two decades.
Federal Reserve officials said Wednesday that inflation has fallen further toward their target level of 2% in recent months but signaled that they expect to cut their benchmark interest rate just once this year. That’s down from their previous projection of three cuts.
Until the Fed begins lowering its short-term rate, long-term mortgage rates are unlikely to ease significantly, economists say.
The average rate on a 30-year mortgage remains near a two-decade high, adding hundreds of dollars a month in costs on a home loan, limiting homebuyers’ purchasing options.
Elevated mortgage rates dampened home sales this spring homebuying season. Sales of previously occupied U.S. homes fell in March and April as home shoppers contended with rising borrowing costs and prices.
The recent pullback in mortgage rates has spurred a pickup in home loan applications, which jumped nearly 16% last week from a week earlier, according to the Mortgage Bankers Association.
“A further decline in mortgage rates, coupled with reports of rising inventory levels in markets across the country, is good news for prospective homebuyers this summer,” said MBA CEO Bob Broeksmit.
The U.S. fines Middle Eastern airline Emirates $1.8 million
WASHINGTON | The Transportation Department said Thursday that it fined Middle Eastern airline Emirates $1.8 million for flights in regions off-limits to U.S. airlines while it allowed JetBlue Airways to sell seats on the planes.
The fine involves a “significant number” of flights from December 2021 to August 2022 that passed over Iraq on their way between the United States and the United Arab Emirates.
UAE-based Emirates was fined $400,000 in 2020 for similar flights and agreed not to repeat the same violation.
JetBlue and Emirates had an arrangement called code-sharing in which the New York-based carrier sold seats on Emirates flights as if they were its own planes. The United States lets foreign airlines operate flights sold under the name or code of a U.S. airline if they obey Federal Aviation Administration restrictions when they do.
The FAA had prohibited U.S. airlines from flying over Iraq at less than 32,000 feet for safety reasons.
According to a consent order, Emirates said the flights were planned to stay above 32,000 feet and only flew lower when ordered to do so by air traffic controllers.
Under the consent order, $300,000 of the fine will be dropped if Emirates avoids violating U.S. restrictions for a year.
Emirates and JetBlue ended their code-sharing partnership in October 2022, a few months before Emirates started a similar deal with United Airlines.
Fired SpaceX employees sue the company for wrongful termination
NEW YORK | Eight former employees sued SpaceX and its CEO Elon Musk, alleging that Musk ordered them fired after they challenged what they called rampant sexual harassment and a hostile “Animal House”-style work environment at the company.
The employees, who filed suit in a California state court, detailed their complaints in a 2022 open letter to management they shared via a company intranet. The next day, four of the plaintiffs were fired, they alleged; others were terminated later after an internal investigation.
In January, the federal National Labor Relations Board filed its own complaint against SpaceX based on issues raised by nine fired employees.
Among other workplace concerns, the open letter called on executives to condemn Musk’s public behavior on X — the platform then known as Twitter — and to hold all employees accountable for unacceptable conduct. Musk’s actions included making light of sexual harassment allegations against him — charges that the billionaire denied.
“As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every tweet that Elon sends is a de facto public statement by the company,” the open letter said at the time. The letter also referred to Musk’s actions as a “frequent source of distraction and embarrassment.”
The plaintiffs are seeking unspecified monetary damages.
The complaint drew connections between Musk’s behavior — in particular, his often lewd posts on Twitter — and the working environment at SpaceX. It states that one of the plaintiffs, Yaman Abdulhak, noted that many of the inappropriate examples cited in a 2021 “appropriate behavior” employee training “closely resembled the contents of Musk’s tweets.” Abdulhak sent examples of those tweets to the SpaceX human resources director, who took no action, the complaint stated.
SpaceX did not immediately reply to an emailed request for comment.
—From AP reports
