Current Events in June 2016

There is a lot of worry among financial planners about Americans' lack of retirement saving.

The advice is usually straightforward: take advantage of tax-deferred savings accounts, especially if your employer will contribute to it.

No one is suggesting you shouldn't be socking money away for retirement, but writing in Kiplinger, Michael Reese, with Centennial Wealth Advisory, makes a case against deferring taxes on retirement savings.

With a traditional IRA or employer-sponsored 401(k) account, contributions to the account are tax deductible. So are any capital gains or income the account produces.

However, at age 70 and a half, the account holder must begin withdrawing the funds and paying taxes on the money as ordinary income. If the account holder dies before the funds are withdrawn, his or her heirs must withdraw all the money and pay taxes on it.

Pay now, not later

Reese argues savers would be better off socking the money away in a regular investment account, forgoing any tax deduction and then paying taxes on any gains or income at the end of each year.

“Think about it this way,” he writes. “Let’s say you are saving $18,000 per year in your 401(k) or 403(b). You are deferring income tax on $18,000 each year you deposit the money. But when you retire, you may have built up an account worth $1 or $2 million. That is $1 or $2 million that has never been taxed! And you, or your heirs, will pay tax on every penny of it.”

Reece says you might have avoided paying some tax on the seed, but you will owe quite a bit on the harvest.

Conventional wisdom

The conventional thinking about tax deferred retirement accounts stems from the idea that people will be in a higher tax bracket during their working years and in a lower bracket during retirement, so the tax bite won't be as big when they withdraw the funds.

Reece says that isn't usually the case. Retirees have not lowered their living standard after their working years, and if they've saved and invested wisely, they haven't lowered their income.

If your employer will contribute to your IRA, Reece says you should take advantage of it, but only contribute the minimum. Don't make it your primary source of retirement savings.

A Roth IRA might be an attractive option. Contributions are not tax deductible, so withdrawals aren't taxed.

The important thing is that you are putting money away for retirement. How you do it is something you should discuss with your accountant or financial adviser.

ACH Food Companies of Memphis, Tenn., is recalling Durkee® Salad Topping, Food Club® branded Salad Topping and Hy-Vee® Garden Style Salad Topping.

The products may be contaminated with Listeria monocytogenes.

The company says it has received no reports of illness to date.

The Durkee® Salad Topping and the Food Club Salad Topping can be identified by the “Best By” date and the Hy-Vee product can be identified by its lot code -- information is printed in black ink on the bottom of the plastic product container.

The following products are being recalled:

The products were sold in retail stores throughout the U.S. and the Dominican Republic.

What to do

Customers who purchased the recalled products should not consume them, but discard them or return them to the place of purchase for a full refund.

Consumers with questions may ACH at 1-800-328-6013 between 8 a.m. and 5 p.m. (CST) Monday through Friday.

Far East Brokers and Consultants of Jacksonville, Fla., is recalling about 6,000 children's chairs and swings.

The screen-printing on the fabric of the chairs and swings contains excessive levels of lead, which is a violation of the federal lead paint standard.

No incidents or injuries are reported.

This recall involves Leisure Ways® pink butterfly themed children’s camp chairs, moon chairs, and swings. The chair and swings have a metal frame with large red butterfly images and other colorful images on the pink polyester fabric.

“Distributed by: Far East Brokers and Consultants, Inc.” and “Tracking # November/2015” are printed on the tracking label sewn into the seat of each chair.

The chairs and swings, manufactured in China, were sold at Weis Markets, wholesale distributors, grocery and drug stores nationwide from January 2016, through April 2016, for between $10 and $50.

What to do

Consumers should immediately stop using the recalled chairs and swings, take them away from children and return them to the place of purchase for a full refund.

Consumers may contact Far East Brokers toll-free at 888-753-9040 from 9 a.m. to 5 p.m. (ET) Monday through Friday or online at www.fareastbrokers.com and click on “Product Recalls” at the right of the page for more information.

Hickory Harvest Foods is again expanding its recall of products that may be contaminated with Listeria monocytogenes.

No illnesses have been reported to date.

The additional products were packaged at, or distributed from Hickory Harvest between June 22, 2015, and May 31, 2016, and were shipped to Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Michigan, Missouri, Mississippi, Montana, North Carolina, North Dakota, Nebraska, New Jersey, New Mexico, Nevada, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Sought Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Washington, Wisconsin and Wyoming.

The following items, sold in packaged bags and deli tubs and marked with Best By Dates located on the front or back of the packages, are being added to the recall:

What to do

Customers who purchased the recalled products should not consume them, but take them back to the store where purchased for a refund, or simply discard them.

Consumers with questions may contact the company at 1-877-237-4374 Monday through Friday, 8:00am to 5:00pm (ET) or by email at askus2@hickoryharvest.com.

Kwik Tek of Denver, Colo., is recalling about 4,200 Hammerhead sleds.

The front handle bar assembly can break, posing a crash hazard.

No incidents or injuries have been reported.

This recall involves Hammerhead sleds, which were sold in blue, green, orange and yellow. The front handle bars have a steering system with polycarbonate skis. The rear HDPE skis are attached to the main aluminum frame.

The units measure 23 inches wide by 9 inches high by 51 inches deep and weigh about 10 pounds. “Hammerhead Pro” is written on the top of the sled.

The sleds, manufactured in China, were sold at LL Bean, Yukon Charlie’s nationwide and online at Amazon.com, EMS.com, LLBean.com, SharperImage.com and YukonCharlies.com from June 2014, to June 2016, for about $180.

What to do

Consumers should immediately stop using the recalled sleds and contact Kwik Tek for a free replacement front end.

Consumers may contact Kwik Tek at 800-624-1297 from 9 a.m. to 5 p.m. MT Monday through Friday or online at yukoncharlies.com and click on “Warranty” in the upper right-hand corner for more information.  

Southeast Toyota Distributors (SET) is recalling 7,749 2005-2011 4Runner, Highlander, Sequoia, and Sienna, 2005-2010 Avalon and Tundra; 2006-2008 Camry Solara, 2006-2011 Rav4 and Tacoma; 2007-2010 FJ Cruiser; 2009-2010 Venza; 2010-2012 Prius; 1988-1990 and 2005-2010 Camry; and 1989 and 2009-2010 Corolla vehicles equipped with aftermarket accessory seat heaters with a copper strand heating element.

The electrical wiring in the seat heaters may be damaged when the seat cushion is compressed. If damaged, the copper strand heating element may short circuit, increasing the risk of a fire.

What to do

SET will notify owners, and dealers will disconnect the seat heaters, free of charge, and refund the purchase price of the seat heater accessory. The recall is expected to begin on July 14, 2016.

Owners may contact SET customer service at 1-866-405-4226. SET number for this recall is SET16B.

The Quaker Oats Company has expanded its earlier recall of all Quaker® Quinoa Granola Bars..

The products may be contaminated with Listeria monocytogenes.

The decision to expand the recall comes as a result of further sunflower kernel contamination found by ingredient supplier SunOpta.

The the following products, distributed nationwide, are being recalled:

• 6.1-oz. boxes of Quaker Quinoa Granola Bars Chocolate Nut Medley with UPC code 30000 32241 and Best Before Dates before 11/15/16.
• 6.1-oz. boxes of Quaker Quinoa Granola Bars Yogurt, Fruit & Nut with UPC 30000 32243 and Best Before Dates before 11/15/16.

What to do

Customers who purchased the recalled products should dispose of them or return them to the place of purchase for a full refund.

Consumers with questions may call 800-856-5781, Monday – Friday, 8:30 a.m. – 6:00 p.m. (EST), or find more information at www.quakeroats.com.

Your credit card can get you more than cash back on purchases and points toward perks. Most provide some basic rental car insurance. Some coverage is better than others.

But to make it pay, a cardholder first needs to know it exists, and then what it covers. Progressive Insurance has found that about 20% of rental car customers always pay for the damage waiver, with another 20% doing so occasionally. But since all rental car payments are made with credit cards, it is very likely most of those purchases are unnecessary.

The credit card review site CardHub has analyzed credit cards, choosing the ones that provide the most coverage for rental cars. Among individual cards, it found the cards issued by CitiGroup provide the most extensive rental car coverage.

Citi cards achieved a score of 95.5%, with American Express' 89.5% being the closest competitor. Chase cards are third, with a score of 87.5%.

MasterCard is best

Cards in the MasterCard network provide the best coverage, but all four networks are ranked fairly close together in their coverage.

The top ranked cards don't require you to sign up for the coverage. It is activated when you decline the rental car company's damage loss waiver. The best cards cover costs stemming from damage to or theft of rental vehicles, up to $100,000.

Like any insurance policy, there are some exclusions. Here's where it pays to have one of the higher-rated cards, because they have fewer exceptions to their coverage.

The average card won't cover a truck, open-bed vehicle, exotic or antique car, or even a large van or full-size SUV. The best cards do cover those vehicles, but draw the line at off-road vehicles. Another common exclusion is tire and rim damage. CardHub found that more than 60% of cards don't cover it.

Almost 40% of cards only cover domestic rentals for up to 15 days, but the best cards will extend coverage up to 31 days.

Fewer global options

You're safe with just about any card if you are renting in the U.S., but only Citi and Discover cards provide global coverage. Ireland, Israel and Jamaica are the most common exclusions among other issuers.

There is something else to understand about rental car coverage. Neither the company's damage loss waiver nor your credit card's coverage will protect you from liability in the case of an accident. You'll need to buy a liability supplement or rely instead on your personal auto insurance policy.

It should cover you but not all policies do. It is a good idea to call your insurance provider before renting a car and asking.

Since the housing bubble popped, it has become more of a challenge to buy a home. For that reason, home sales plunged in 2009 and 2010.

But the market has recovered. Sales are up and so are prices. But not all renters think they are able to make the leap to homeownership, even though a California Association of Realtors (CAR) survey shows they would like to.

The results may not be all that surprising, given that California has some of the hottest real estate markets in the nation. The median home price in San Jose is approaching $1 million.

The survey shows the desire is there. Nearly half of renters in the survey said they plan to buy a home at some point. Most, however, admit they aren't quite ready financially.

Financial obstacles

First, they need to save for a down payment, find an affordable house they like, and improve their overall financial picture.

Of the 28% of renters who don't plan to buy in the future, half of them said affordability is the main issue. Only 20% said they would rather rent a home than buy one.

In the wake of the housing meltdown, there was some speculation that a large portion of the population – primarily Millennials – would become permanent renters. The survey – along with more recent housing data – suggests that isn't the case.

Nearly four in 10 renters said they expect to purchase a home in the same county where they are renting. Twenty-three percent said they would look for a home in the same neighborhood. Most who said they would buy elsewhere said they would leave the area because homes are too expensive.

What to do

According to Freddie Mac, there are certain important steps a consumer can take to prepare for buying a home. The first is the simplest – improve your credit score. You can do that by paying all your bills on time, and by establishing credit and using it wisely.

Next, decide how much you can afford to spend on a house. Remember that you will be required to put at least 3% down and have the resulting monthly payments be affordable. And it's not just principal and interest you have to consider, but taxes and insurance as well.

Begin saving money for a down payment. Make sure you save enough to cover moving expenses and any deposits required for services.

Before beginning your search, get pre-qualified for a mortgage. A mortgage loan officer will review your income, expenses, and credit score, and make an estimate of the amount of money you might be able to borrow.

This is not a guarantee you will get the loan, but a pre-qualification letter will tell sellers and their agents that you are a serious buyer.

Finally -- some respect!

According to the annual National Retail Federation (NRF) survey, consumers plan to spend more than ever on Father’s Day this year.

The survey conducted by Prosper Insight and Analytics, shows shoppers will spend an average of $125.92 for the holiday -- up more than $10 from last year, with total spending expected to reach $14.3 billion.

While that's the most in the survey’s 13-year history, it's a far cry from the Mother’s Day total of $21.4 billion.

What they'll buy

The survey finds consumers plan to spend $3.1 billion on special outings such as dinner, brunch, or other types of a “fun activity/experience” (given by 47%). Clothing (43%) and gift cards (41%) are tied at just under $2 billion each, while consumer electronics (20%) follow at $1.7 billion.

As with Mother’s Day, greeting cards are the most commonly purchased gift at 65% but account for only $833 million of projected spending. Other popular gifts include personal care, automotive accessories, books, music, home improvement/gardening supplies and sporting goods.

In addition, 22% of shoppers say they'll opt for a “gift of experience” such as tickets to a concert or a sporting event. Two in five millennials are planning to give an experience, significantly higher than older generations.

Where they shop

Thirty-eight percent of consumers will head to department stores in search of the perfect gift, 32% will shop online, and 27% will check out a discount store. Another 24% will go to a specialty store and 17% will do their shopping at a local small business.

Among smartphone owners, 30% will use them to research gift ideas, but only 16% will actually buy something. Tablets are used more frequently both to research (32%) and buy (19%).

More than half of those surveyed plan to buy for their father or stepfather (53%), while others will shop for their husband (28%) or son (9%).

The survey of 7,200 consumers, conducted May 2-10, has a margin of error of plus or minus 1.2 percentage points.

There wasn't a lot of change in the labor market during April.

The Bureau of Labor Statistics reports the number of job openings was fairly steady during the month at 5.8 million. At the same time, the number of hires edged down to 5.1 million while separations were little changed at 5.0 million.

Job openings

The job openings rate was 3.9% as the number of openings showed little change for total private and for government. Large increases occurred in wholesale trade (+65,000), transportation, warehousing, and utilities (+58,000), durable goods manufacturing (+46,000), and real estate and rental and leasing (+41,000). Openings in the professional and business services sector were down by 274,000. The number of job openings was little changed in all four regions.

Hires

With a hires rate of 3.5%, the number of hires for total private and for government edged down 31,000. Hires were little changed in all industries in April and decreased in the Midwest region.

Separations

Total separations includes quits, layoffs and discharges, and other separations. The category is referred to as turnover. The total separations rate in April was 3.5%. The number of total separations was little changed for total private and for government, and all industries experienced little change in total separations over the month.

Net change in employment

Over the 12 months ending in April, hires totaled 62.4 million and separations totaled 59.7 million, yielding a net employment gain of 2.7 million. These totals include workers who may have been hired and separated more than once during the year.

The full report is available on the BLS website

Initial claims

Separately, the  Department of Labor (DOL) reports first-time jobless claims came in below 300,000 last week for the 66th consecutive week -- the longest streak since 1973.

In the week ending June 4, initial applications for state unemployment benefits totaled a seasonally adjusted 264,000, down from the previous week's revised level of 268,000.

The four-week moving average, seen as a more active gauge of the labor market because it's not as volatile as the weekly compilation, fell 7,500 from the previous week's revised total -- to 269,500.

The complete report may be found on the DOL website.

SunOpta is expanding for a second time its recall of certain sunflower kernel products.

The products may be contaminated with Listeria monocytogenes.

No illnesses related to the consumption of these products have been have been confirmed.

This expanded recall includes certain sunflower kernel products originating from SunOpta’s facility in Crookston, Minn., between May 31, 2015, and January 31, 2016.

The recalled retail sunflower kernel items were sold in clear printed plastic packages and are marked with Best By Dates located on the front or back of the packages. Recalled snack bars were sold in boxes of 12 units.

The following items are being recalled:

The recalled products were distributed to distribution centers in California, Colorado, Connecticut, Florida, Illinois, Iowa, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Montana, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, Wisconsin and Canada, and may have been redistributed elsewhere.

What to do

Customers who purchased these products should not consume them, but take them back to the store where they were purchased for a refund, or simply discard them.

Consumers seeking information may email contactus@sunopta.com or call 1-888-886-4428 Monday through Friday, 8:00 a.m. to 5:00 p.m. (CDT).

Depression – it’s a condition that has affected millions of people all around the world, and it can manifest itself in so many different ways. However, one common feeling that is often associated with it is one of hopelessness; it can often be hard for depressed individuals to imagine that things can ever get better.

But a new study shows that this is not necessarily the case. A team of researchers have found that 39% of individuals who have experienced a form of major depression are able to recover and achieve complete mental health. The team has also identified factors that both aid and detract from an individual’s ability to overcome the condition.

“This research provides a hopeful message to patients struggling with depression, their families and health professionals. A large number of formerly depressed individuals recover and go on to reach optimal well-being,” said lead author Esme Fuller-Thomson.

Full recovery never out of reach

While the phrase “complete mental health” may seem murky, the researchers clearly define it as a state that is reached when a person is able to achieve almost daily happiness or life satisfaction, positive social and psychological well-being, and are also free of depression, anxiety, suicidal thoughts, and substance abuse for at least one full year.

The study utilized a sample of over 2,500 participants who had shown symptoms of major depressive disorder at some time in their life. After collecting data on each participant, the researchers found that 39% of them were able to overcome their depression and achieve complete mental health.

Additionally, they found that the length of the depressive episode had no bearing on whether or not a participant was able to achieve complete mental health. For example, those who had long depressive episodes (lasting over two years) were able to overcome their depression just as often as those who experienced a depressive episode for one month.

“In other words, there is no need for individuals and families to lose hope that a full recovery is beyond reach,” remarked study co-author Senyo Agbeyaka.

Social support is key

While the length of the depressive episode had no bearing on a participant’s ability to achieve complete mental health, there were some factors that the researchers identified as being important to recovery.

Perhaps the most influential of these factors was the presence of social support. The researchers found that participants who had close ties to the people around them were much more likely to overcome their depression.

“Formerly depressed adults who had emotionally supportive and close relationships were four times more likely to report complete mental health than those without such relationships,” said co-author Mercedes Bern-Klug. “Having at least one trusted friend was critical to cultivating complete mental health.”

Inhibiting factors

On the flip side, the researchers found that certain factors stopped participants from achieving complete mental health. Some of these included poorer physical health, functional limitations, and insomnia. The researchers believe that these findings should inform how health care professionals treat depression.

“Clearly, this underlines the importance for health professionals to consider strategies that address both physical health problems and social isolation when treating those with depression,” said co-author Deborah LaFond.

The full study has been published in the journal Psychiatry Research.

If you were to choose a credit card solely for use to pay travel expenses, CreditCards.com recommends the Chase Sapphire Preferred card.

The credit card website says the Chase Sapphire Preferred came out on top in its latest rankings. It won points for the 50,000 points cardholders get just for opening an account.

It also won praise for ease in cashing in those points and its collection of rewards the judges described as “user friendly.”

Popular card

There is no doubt the Sapphire Preferred is a popular card. Back in March it ranked very high when ConsumerAffairs rated the best reward cards, singled out for its many travel-related perks.

We pointed out that to earn the 50,000 bonus points, new customers needed to charge $4,000 on the card in the first three months the account is open. Those points are good for $625 toward airfare and lodging when you redeem them through Chase Ultimate Rewards.

On the downside, the card carries a $95 annual fee, but it is waived the first year. After that it costs you nearly $100 to carry this card, so you have to take advantage of the rewards to make it pay.

The CreditCards.com judges were also impressed that customers who dine out frequently can easily rack up extra bonus points.

“Hit the sweet spot”

"The Chase Sapphire Preferred card has hit the sweet spot for the frequent but not constant traveler," says CreditCards.com Editor-in-Chief and travel card judge Daniel Ray.

He notes the sign-up bonus provides a generous head start and a frequent traveler can easily accumulate valuable points.

Placing second in the competition is Capital One's Venture Rewards card. It gained points for its low interest rates and consumer-friendly redemption policy.

Coming in third was the Barclaycard Arrival Plus World Elite MasterCard. It impressed judges by granting cardholders two miles for every dollar they spend. On top of that, it comes with a generous 40,000-mile bonus.

Coffee is perhaps best known for its ability to inject a little pep into an otherwise sluggish morning routine. But waking up with a cup of joe may have even more benefits for those who exercise in the morning.

Research shows that those who drink coffee before a workout experience a boost in performance.

The energy-imbuing elixir helps your mind and body work harder during a workout, says Heidi Skolnik, M.S., a sports nutritionist and owner of Nutrition Conditioning, Inc.

"Caffeine is a stimulant that acts on the central nervous system, the heart, and possibly the 'center' that controls blood pressure," Skolnik told the Daily Burn.

She adds that coffee can also help you enjoy the workout more, since it can increase the release of feel-good neurotransmitters like dopamine, which affects mood and pain receptors.

Studies have also found that pre-workout coffee drinkers consume 72 fewer calories later in the day and have an easier time resisting the urge to succumb to food cravings.

But before you decide to swing by the coffee shop on your way to the gym, be advised that timing can play a role in how coffee impacts your workout performance.

One hour before

Skolnik explains that drinking a cup of coffee about an hour before you hit the gym is optimal, as the body wastes no time putting the caffeine to work.

"Caffeine is quickly absorbed from the stomach within 15 to 45 minutes of consumption, but it hits its peak stimulatory effects between 30 and 75 minutes," Skolnik says.

But while coffee is a fluid, Skolnik emphasizes that a 250-300 mg cup of coffee isn’t enough fluid to get your body ready for a workout. In addition to drinking coffee, she recommends drinking at least seven to 12 ounces of water during the hour or two before your workout.

Indeed, staying hydrated is key -- and water is usually best. A recent study found that attempting to rehydrate with soft drinks may actually increase dehydration.

The trend has been undeniable for at least three decades. Americans are increasingly overweight and even obese.

A report published in the Journal of the American Medical Association (JAMA) shows more women and children are now classified as obese, with a body mass index (BMI) of 30 and above.

By one accounting, 38% of all U.S. adults are obese and 40% of U.S. women are now in that category.

More distressing for health researchers, one-third of adults are overweight, meaning that they have a BMI of between 25 and 30. People who are overweight are at risk of becoming obese.

By the study's accounting, fewer than a third of all adults in the U.S. have a normal, healthy weight.

Women gaining weight faster

This latest study finds women have been putting on weight faster than men, at least they have recently.

“For women, the prevalence of overall obesity and of class 3 obesity showed significant linear trends for increase between 2005 and 2014,” the authors wrote. “There were no significant trends for men. Other studies are needed to determine the reasons for these trends.”

Analyses of data from 2013-2014 found that for both men and women, the likelihood of obesity varied by race. For men, it also varied by smoking status. Men who smoked cigarettes were less likely to be obese, compared to those who never smoked. For women, there were no significant differences by smoking status. However, women who had attended college were significantly less likely to be obese.

More pessimistic

The report, compiled by researchers at the Centers for Disease Control and Prevention (CDC), is more pessimistic than last year's annual obesity assessment from the Robert Woods Johnson Foundation. It found obesity had increased in isolated spots, but had held steady in the country overall.

Health researchers have spent a lot of time and effort trying to pinpoint the cause for the unhealthy surge in obesity. Some have pointed to a much more sedentary American lifestyle. Others point to high calorie diets, in particular, diets heavy on processed food.

Health advocates are trying to reduce America's obesity rate, since the added weight can lead to a whole host of conditions, from diabetes to heart disease.

To see whether you are normal weight, overweight, or obese, use this BMI calculator from the National Institutes of Health.

A surge in mortgage applications last week.

The Mortgage Bankers Association (MBA) reports applications jumped 9.3% in the week ending June 3, with an an adjustment for the Memorial Day holiday taken into account.

Refinance applications shot up 7%, although the refinance share of mortgage activity fell to 53.8% of total applications from 54.3% the previous week.

The adjustable-rate mortgage (ARM) share of activity held steady at 5.0% of total applications, the FHA share rose to 13.0% from 12.5%, the VA share of total applications was down 0.5% to 11.5%, and the USDA share of total applications was unchanged at 0.7%.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) dipped two basis points -- from 3.85% to 3.83% -- with points decreasing to 0.33 from 0.36 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) was unchanged at 3.81%, with points decreasing to 0.25 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA rose six basis points to 3.71%, with points decreasing to 0.23 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages slipped to 3.11% from 3.12%, with points decreasing to 0.35 from 0.40 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs fell four basis points to 2.96%, with points decreasing to 0.29 from 0.44 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The MBA Weekly Mortgage Applications Survey covers over 75% of all U.S. retail residential mortgage applications.