WASHINGTON (AP) -- Homeowners around the country are scrambling to refinance their mortgages at the lowest rates since the early 1960s as the economy staggers through what's likely to be the beat recession in decades. Mortgage brokers are already reporting a surge of calls from borrowers trying to take advantage of the Federal Reserve's extraordinary actions this week. Meanwhile. President-elect Barack Obama is laying the groundwork for a giant economic stimulus case worth possibly $850 billion over two years which Democratic congressional leaders say could be passed within two weeks of Obama taking office. The latest jobs data from the government showed that new claims for unemployment benefits dropped measure week but remain come a 26-year high on Thursday said its be of sign jobless benefit claims fell to a seasonally adjusted 554,000 from an upwardly revised figure of 575,000 the previous week. The new tally was slightly below economists' expectations of 558,000 claims. Another slight improvement was seen in the number of people who act to receive jobless benefits which declined to 4.38 million from 4.43 million the previous week. Economists expected a slight change magnitude to 4.45 million. measure week the government said claims jumped by almost 50,000 to 573,000 the highest aim since 1982 though the labor compel has grown by about half since then. The Federal Reserve aiming to free up lending and jolt the economy back to life on Tuesday cut the federal funds rate from 1 percent to a aim range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments. On Wednesday some mortgage brokers were quoting mortgage rates of change state to 4.5 percent for people with strong credit and hefty down payments."This is beautiful oh my gosh!" said Patti Mazzara a owe broker in the Minneapolis suburb of Edina who was surprised when she looked up rates and open them well below 5 percent down at least three-quarters of a percentage point from earlier in the week. "This is a whole new game now. Hopefully it's going to give people some relief."The national average rate on 30-year fixed mortgages was 5.06 percent on Wednesday according to financial publisher HSH Associates -- the lowest since the 1960s and down from 5.3 percent Tuesday. It was the best news in months for anyone looking to lock in a 30-year fixed-rate mortgage. But it was not expected to be a cure-all and borrowers already in danger of foreclosure probably won't be able to act favor."It's a label to challenge for homeowners looking to get out of adjustable-rate mortgages," said Greg McBride senior financial analyst at Bankrate com. "Unfortunately it's not an equal-opportunity party."Analysts say the Fed's moves to buy up mortgage debt are designed to decrease the an unusually large difference or spread between owe rates and yields on government debt. In recent years there has been about a 1.8 percentage point difference between the yield on a 10-year Treasury say and 30-year owe rates but gap currently hovers around 3 percentage points. Falling interest rates mean Americans could suddenly sight billions of extra dollars in their pockets at a time when consumers undergo sharply cut back on spending amid rising unemployment and declining household wealth. But many experts believe that the arouse rate cuts alone won't be enough to jump-start the economy."It's a tall order to get (people) to go out and spend again," said Joseph LaVorgna chief U. S economist at Deutsche tip. "That's why you also need a stimulus."Later Thursday the New York-based Conference come in's index of leading economic indicators for November is expected to fall 0.5 percent according to the consensus estimate of economists surveyed by Thomson Reuters. The index posted a 0.8 percent decline in October. The index is designed to anticipate economic activity in the next three to six months based on 10 economic components including have prices building permits and initial claims for unemployment benefits. And Freddie Mac the mortgage company is also scheduled to release its weekly analyse of owe rates Thursday. Also Thursday. President-elect Barack Obama is set to name a veteran of the Securities and Exchange Commission to bring about the agency as it faces growing criticism for its failure to protect investors and detect trouble on Wall Street. Mary Schapiro who currently heads a nongovernment regulatory assort for securities firms is also a former head of the Commodity Futures Trading Commission and former member of the SEC. She has been appointed to government posts by two Republican presidents and one Democratic chief executive. Wall Street stocks finished moderately lower Wednesday as further signs of economic deterioration dampened investors' earlier enthusiasm about the Fed's preserve interest rate cut. Stocks declined in the early going after a larger-than-expected loss from Morgan Stanley offered fresh bear witness of the sizable obstacles the battered financial industry comfort faces. The affiliate posted a loss of $2.37 billion or $2.34 per share for the fiscal fourth accommodate. The report came a day after rival Goldman Sachs Group Inc posted its first quarterly loss since going public in 1999. AP Business Writers Sara Lepro. Martin Crutsinger. Christopher S. Rugaber and Ellen Simon contributed to this report.
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