A highlight from Why long-term unemployment starts at 27 weeks


Neither a borrower lender be the saying goes unless you know you get a really good interest rate right from american public media. This is marketplace in los angeles. I'm carl result is thursday today the twentieth day of may good as always have your long everybody. We begin today with the cost of money in this economy. Interest rates in the vernacular for the very best and most credit worthy borrowers which is big wall street. Banks mostly that cost. The federal funds rate is called has been said by the federal reserve at zero to one quarter of one percent so early free money if the united states treasury wants to borrow your money that is sell you say a ten year treasury note they'll have to pay about one point six percent today. We'll get to that later in the program as we always do you though to borrow me be over thirty years for a fixed rate mortgage freddie mac said today it will cost you just about three percent. You'll have to pay fees of a bit more than a half percent on top of that taking up. Those rates are still incredibly low by historical standards for mortgages and those low rates. Which are again. The cost of money are tempting people to borrow more and that intern is driving up the average size of a mortgage in this economy. As marketplace's amy scott reports home prices are rising at the fastest pace in fifteen years. Partly because low. Interest rates are fueling demand for not enough houses that puts pressure on loan sizes because you know to purchase a home at a higher price. You're gonna need to borrow more money. Len kiefer as an economist at freddie mac. The mortgage bankers association said this week. The average size of purchase loan was four hundred eleven thousand dollars. The highest since february and the average loan for a new home reached more than three hundred. Seventy seven thousand dollars last month. A record high the group's head of forecasting joel con says part of this is about the kinds of homes. People are buying. You know the bigger house in the suburbs. With more outdoor space these homeowners typically are still gainfully employed right might be higher income etc. So they might be before a little bit more to compete for. Those borrowers lenders have been loosening. Credit standards the nba's mortgage credit availability. Index increased almost five percent last month for conventional loans and seven percent for jumbo loans. Odette khushi is deputy chief economist. At first american a title insurance company. That's really a function of the fact that our economy is improving. The labor market is improving into lenders. Feeling a little bit more confident she says borrowers still need privy pristine credit to qualify for a mortgage michael neale with the urban institute says the risk of larger mortgages and looser standards is if prices suddenly drop for those that have just recently gotten a mortgage you know. They've had less time to benefit from house. Price appreciation increasing the likelihood that they'd be underwater. Most analysts are expecting prices to fall anytime soon. I'm amy scott for marketplace. So here's a question. What do you think is the most trusted institution in american society. Today government nonprofits. Maybe the media don't answer that one. Thank you the answer. From a global survey by the public relations firm element is business and with that trust it turns out come. Expectations marketplace's scott. Tong has our story. The survey finds that people think business outperforms government on a range of social issues healthcare inequality jobs climate. Change economists margaret blair. Professor merida at vanderbilt law is not surprised. Especially now we have disillusionment with government to solve these kinds of problems whereas business has actually done fairly well in getting through the pandemic blair sees a broader shift underway. Fifty one years ago the free market economist. Milton friedman argued that the job of business was prophets not conscience but the pendulum swinging back in part because today's customers and employees demanded so says george the former ceo of medtronic loud. Ceo's are still baby boomers than i say you know you really need to be personal touch with all your millennial employees. They want their ceo to have a position. In fact they don't wanna work there. Less their company is clear on what it stands for but there is a risk that expectations are too high and that businesses still in milton. Friedman mode will under deliver social change. Here's historian eric loomis. At the university of rhode island corporations and business exists for one single reason and that's prophet so lessons in their profit interest to attack racism to attack transphobia to take leadership on vaccines. They're not going to want to do in fact. Today's survey warns against over reliance on business as a savior. I'm scott tong for marketplace. On

Coming up next