Sep 24, 2012 | Mortgage Rates
Mortgage markets improved for the second consecutive week last week as demand for U.S. mortgage-backed bonds remained high. A series of economic reports showed strength in housing and a stability in jobs.
Wall Street looked past it, however, to send mortgage rates to their lowest levels in history.
One week into the Federal Reserve’s newest bond-buying program, the stimulus appears to be working.
According to Freddie Mac, the average 30-year fixed rate mortgage rate slipped to 3.49% last week for borrowers willing to pay an accompanying 0.6 discount points at the time of closing. Discount points are a one-time closing costs where 1 discount point is equal to one percent of your loan size.
3.49% marks a new all-time low for the 30-year fixed rate mortgage.
The 15-year fixed rate mortgage rate fell to a new all-time low last week, too, dropping to 2.77% with the same accompanying 0.6 discount points.
Mortgage rates in Worcester County area fell despite strong housing data.
- Housing Starts rose 5.5% to a 2-year high
- Existing Home Sales rose 7.8% to a 2-year high
- Building Permits rose 0.2%
Notably, according to the National Association of REALTORS®, the national existing home supply slipped to 6.1 months last month — very close to the 6.0-month marker which separates a “buyer’s market” from a “seller’s market”.
If supplies continue lower, home prices may rise more quickly than expected into 2013. Median home sale prices are already 9.5% higher as compared to one year ago.
This week, more housing data is set for release including the home value-tracking Case-Shiller Index and FHFA Home Price Index. Both are expected to show rising home prices as compared to the last recorded month, and one year ago. In addition, the National Association of REALTORS® releases its Pending Home Sales Index.
Lastly, and likely most important to mortgage rates and home affordability in Worcester County area , the government releases its Personal Consumption Expenditures (PCE) report Friday. PCE is the Federal Reserve’s preferred inflation gauge. An unexpected increase is expected to move mortgage rates higher.
Sep 17, 2012 | mortgage-rates-whats-ahead-september-17-2012
Mortgage markets improved last week as the Federal Reserve introduced new economic stimulus. The move trumped bond-harming action from the Eurozone, and a series better-than-expected U.S. economic data.
The 30-year fixed rate mortgage rate dropped last week for most loan types, including for conforming, FHA and VA loans. 15-year fixed rate mortgage rates improved, as well.
Mortgage rates are back near their lowest levels of all-time.
Last week’s main event was the Federal Open Market Committee’s sixth scheduled meeting of 2012. Wall Street expected the Fed to launch a third round of quantitative easing (QE3) after its meeting and the nation’s central banker did not disappoint.
It launched QE3 and did so with such scale that even Wall Street was shocked.
The Federal Reserve announced a plan to purchase $40 billion monthly of mortgage-backed bonds indefinitely, a move aimed at lowering U.S. mortgage rates in order to stimulate the housing market which can create more jobs in construction and other related industries. (more…)
Sep 13, 2012 | Federal Reserve
The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Thursday. For the eighth consecutive meeting, the vote was nearly unanimous.
Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that the U.S. economy has been expanding “at a moderate pace” in recent months, led by growth in household spending. However, “strains in global financial markets” remain a significant threat to growth in the near-term, a remark made in reference to the Eurozone and its sovereign debt and recession issues.
The Fed’s statement also included the following economic observations :
- Growth in employment has been slow with unemployment elevated
- Inflation has been subdued, despite rising gas and oil prices
- Business spending on equipment and structures has slowed
In addition, the Fed addressed the housing market, stating that there have been signs of improvement, “albeit from a depressed level”. (more…)
Aug 1, 2012 | Federal Reserve
The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday. The vote was nearly unanimous.
Only one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that the U.S. economy has “decelerated somewhat” since January. Beyond the next few quarters, though, the Fed expects growth to “remain moderate” and then gradually pick up. (more…)
Dec 6, 2011 | Federal Reserve
The Federal Open Market Committee released its November 2011 meeting minutes, revealing a Fed split on whether new stimulus is needed for the U.S. economy.
The Fed Minutes is published 8 times annually, three weeks after each scheduled Federal Open Market Committee meeting. It’s the official record of the meeting’s policy-shaping debates and dialogues.
The Fed Minutes is the lengthier companion piece to the FOMC’s more well-known, post-meeting press release.
As compared to press release which is concise and focused at 492 words, the Fed Minutes is comprehensive and broad, totalling 7,682 words over 11 pages, complete with charts.
The November minutes reveal Fed opinions on a variety of economic issues :
- On employment : Unemployment will gradually decline through 2014
- On housing : The market remains depressed. Foreclosures are “holding back” growth.
- On rates : The Fed Funds Rate should remain low until mid-2013
There was also discussion about the government’s revamped HARP program, (more…)
