Daily Data Flow: Mortgage Rates Tumble to Record Low; Stocks Drop as Economic Data Disappoints; Investors Unwind Risk-on Plays

Mortgage Rates for 30-Year Loans Tumble, Matching Record (Bloomberg)
The average rate for a 30-year fixed mortgage fell to 3.49% in the week ended today, dropping from 3.55%, McLean, Va.-based Freddie Mac announced. It matched a record reached in July. The average 15-year rate slid to 2.77% from 2.85% to mark a new low. Reduced borrowing costs, spurred in part by the Federal Reserve’s purchase of mortgage securities, have aided a housing-market recovery, after the worst downturn since the 1930s. Sales of existing homes climbed to a two-year high in August, the National Association of Realtors reported yesterday. Single-family housing starts rose to the fastest annual rate since April 2010, the Commerce Department reported. The recovery is “very slow” but things are looking up, said Patrick Newport, U.S. economist at IHS Global Insight in Lexington, Mass.

U.S. Stocks Drop as Global Data Disappoint (Marketwatch)
Weak data on the U.S. labor front followed reports illustrating slowing growth in China and Europe, with figures from the Labor Department showing first-time jobless claims fell by 3,000 last week to 382,000, slightly above the 375,000 estimated by economists polled by MarketWatch. “Economic activity is mixed. Some sectors are doing well, while others are weak. What was strong during the early part of the economic recovery is getting weaker now and what was weak is getting stronger,” a Wells Fargo official said.

Unwinding of Risk-On Continues (Seeking Alpha)
The unwinding of the recent risk-on plays continues today, sparked by three factors. First, another month with the Chinese PMI (HSBC flash) below the 50 boom/bust level at 47.8 (up marginally from the previous 47.6), allows anxiety to continue to run high about the kind of landing the world’s second-largest economy is having. Second, the euro zone flash PMI was disappointing. Third, the well received Spanish 3- and 10-year bond auctions today are seen as delaying what is viewed as an almost inevitable formal request for aid, and this situation appears to be weighing on Spanish bond prices.

Household debt posts largest rise since 2008 (Reuters)
Households increased their borrowing by the most since early 2008 in the second quarter, while their worth declined, suggesting many consumers are still struggling three years into an economic recovery. Household debt climbed $39.4 billion, the first gain in over a year, to $13 trillion in the second quarter, according to Federal Reserve data issued on Thursday — just $2 trillion shy of the country’s total yearly economic output. The latest Census data showed median U.S. incomes fell 1.5% to $50,054 in 2011, after adjusting for inflation, the second consecutive annual drop.