Dec 3, 2012 | Mortgage Rates
Low mortgage rates are pumping up home affordability.
Average 30-year fixed-rate mortgage rates made a new all-time low in November, continuing this year Refinance Boom and giving fuel to the budding housing market recovery.
At month-end, Freddie Mac’s survey of 125 banks nationwide put the benchmark product’s rate at 3.32% for borrowers willing to pay 0.8 discount points. This is just 0.01 percentage point above the record-low rate establishing prior to Thanksgiving.
The 15-year fixed mortgage is similarly low, posting 2.64 percent nationwide, on average. This, too, is only slightly higher the all-time low set the week prior.
Falling mortgage rates have helped to offset rising home prices in many U.S. cities.
Steady job creation and rising consumer confidence has swelled the pool of home buyers nationwide, causing home inventories to shrink and home prices to rise. The improving economy has also led to rising rents and now, within many housing markets, it’s less costly to buy and own a home than to rent a comparable one.
A $1,000 mortgage payment affords a $225,000 mortgage payment in Massachusetts.
Last week, the economy was shown to be improving.
- The Commerce Department showed that the Gross Domestic Product increased at a 2.7% annual rate in Q3 2012
- The Labor Department showed first-time unemployment filings dropping by 23,000 claims
- The Pending Home Sales Index jumped to its highest point since April 2010
- The Existing Home Sales report showed home sales up 2.1%
- The Case-Shiller Index showed home values making annual gains
In addition, Federal Reserve Ben Bernanke said that the central bank will take action to speed economic growth, should the U.S. economy start to side-step.
This week, there is little on the U.S. economic calendar, save for Friday’s Non-Farm Payrolls report. Wall Street is expecting to see 80,000 net new jobs created in November, and a rise in the national Unemployment Rate to 8.0%.
If the report’s actual results are stronger-than-expected, mortgage rates will likely climb from their all-time lows. If the report comes back weak, rates should stay unchanged.
Mar 13, 2012 | Federal Reserve
The Federal Open Market Committee meets today, its second of 8 scheduled meetings this year. As a home buyer or would-be refinancing household , get ready for changing mortgage rates.
The Federal Open Market Committee is the 12-person sub-committee within the Federal Reserve that votes on the nation’s monetary policy. Led by Federal Reserve Chairman Ben Bernanke, the FOMC’s most prominent role is as steward for the Fed Funds Rate.
The Fed has said repeatedly that it intends to keep the Fed Funds Rate near 0.000 for an “extended period of time”, through 2014 at least.
Unfortunately, this doesn’t mean that Worcester County area mortgage rates will remain low as well. Mortgage rates are not set by the Federal Open Market Committee. Mortgage rates are set by Wall Street.
As proof that the Fed Funds Rate is distinct from mortgage rates, (more…)
Jan 25, 2012 | Federal Reserve
Wednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The Fed Funds Rate has been near zero percent since December 2008.
For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed’s official statement.
In its press release, the Federal Reserve noted that the the U.S. economy has “expanding moderately” since its last meeting in December 2011, adding that the growth is occurring despite “slowing in global growth” — a reference to ongoing economic uncertainty within the Eurozone.
The Federal Reserve expects moderate economic (more…)
Jan 12, 2012 | Federal Reserve
The Federal Reserve has released the minutes from its most recent Federal Open Market Committee meeting. The Fed Minutes are a detailed meeting recap; the companion piece to the more brief, more well-known press release.
As a comparison, the minutes of the last FOMC meeting contained 60 paragraphs and 7,027 words. The post-meeting press release was just 5 paragraphs and 382 words.
December’s Fed Minutes shows Fed members with a positive, cautious, take on the economy.
Recent data suggests that the U.S. economy is expanding, the Fed said, but “strains” in global financial markets pose “significant risks” to the downside. This tell us that the Fed believes its economy-stimulating programs are working, but that officials remained concerned by events in the Eurozone.
The U.S. economy could be impacted (more…)
Dec 13, 2011 | Federal Reserve
Tuesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The vote was nearly unanimous for the second straight month. Just one FOMC member dissented in the vote, favoring additional policy stimulus beyond what the Federal Reserve currently provides.
In its press release, the Federal Reserve sais that the the U.S. economy is improving, noting that since its November 2011 meeting, the economy has been “expanding moderately”. The Fed also added that domestic growth is occurring despite some “apparent slowing in global growth” — a nod to ongoing uncertainty within the Eurozone.
The Federal Reserve expects a moderate pace of growth over the next (more…)
