Breaking News

Breaking News: The Taper Clock is Ticking…

 

The Federal Open Market Committee (FOMC), that regulates the interest rates that banks pay for money, just announced that they are not going to change interest rates currently (good news). They went on to say, however, that they are going to accelerate their timeframe for reducing that amount of mortgage backed securities that they are buying each month starting October instead of December (bad news for rates).  12 out of 16 FOMC members predict a rate hike this year. 

 

This is basically what the markets were expecting with the exception of the acceleration of tapering.  This is negative for pricing. 

 

This news should create a sense of urgency for the public when they watch the news this evening.  The clock is ticking…get your buyers to us to get preapproved right away.

Call The Easterbrook Team Today

916.850.6050

Investors Liked What the Fed's Said?

Investors liked what the Fed said—or didn't say—following last Wednesday's meeting. Both stocks and bonds reacted favorably; meanwhile, the economic data had little impact. As a result, mortgage rates ended the week lower. 

As expected by most investors, the Fed did not raise the federal funds rate. The Fed explained in its post-meeting statement that the case for a rate hike “has strengthened,” but Fed officials decided to wait for “further evidence of continued progress toward its objectives.” Notably, Fed officials remain divided about the appropriate timing to tighten monetary policy. In a rare occurrence, three out of ten voting Fed members dissented from the decision because they wanted a rate hike to take place at this meeting. Conversely, three Fed officials indicated in their forecasts that they do not see a need to raise rates at all this year. Investors were pleased that the Fed did not come out more strongly in favor of tighter monetary policy, and mortgage rates improved following the meeting. 

The housing data released over the past week was mixed. After reaching a multi-year high this summer, sales of previously owned homes in August declined for the second straight month. According to the National Association of Realtors, low levels of inventory are holding back home sales in many regions. Inventories of homes for sale declined 3% from July and were 10% lower than a year ago. 

There are signs that building activity for single-family homes may pick up in coming months, however. In August, building permits for single-family homes increased 3.7% from July, which was the largest monthly increase since June 2014. In addition, the NAHB home builder confidence index jumped to 65 in September, which matched the highest reading since 2005.

John Easterbrook

NMLS# 226555

Mortgage Loan Officer

806 Bidwell Street

Folsom, CA 95630

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John.Easterbrook@spmc.com

Fed's Announce in December

Tragic world events often lower our interest rates. Today was no exception. Don't expect a lasting drop, however. Bond traders are expecting a rate increase in December and we'll have a bumpy ride in rates until the Fed makes a decision in December. If you are thinking of financing, it's more important than ever to have a lender with up to the minute rate updates - it can save you hundreds of dollars.


Call The Easterbrook Team Today at 916-850-6050 or email easterbrookteam@spmc.com

Fed Keeps Interest Rate Steady, Preserving Job Growth

The Federal Reserve announced on Thursday that it is keeping its benchmark interest rate at or near zero, allowing job growth to continue unhindered.

The Fed’s federal funds rate -- the interest rate the Fed charges for banks to lend to one another overnight -- will remain at target rate of 0.0-0.25 percent, where it has been since December 2008 at the height of the financial crisis. The Federal Open Market Committee (FOMC), the central bank body charged with adjusting key rates, will have its next chance to adjust the influential interest rate when it meets again on Oct. 27 and 28.

By leaving the key interest rate untouched, the Fed is deliberately maintaining economic demand by preserving the current low cost of credit for consumers and businesses. If the Fed had raised rates, it would lower demand for goods and services, which in turn would reduce demand for workers and slow job growth. Fewer available jobs means less competition for workers, limiting wage growth.

The decision to postpone a rate hike was not unexpected. Some Fed officials have been indicating for weeks that fears about China and other emerging markets that spurred August’s stock market losses were giving them pause about a September rate hike. William Dudley, president of the Federal Reserve Bank of New York, expressed those concerns in remarks he made on Aug. 26, calling a September rate hike “less compelling” than it had been in the weeks prior.

The news will likely reassure anxious investors and prompt stock prices to rise. It guarantees another month without more expensive credit and the dampening effect it would have on trading, however minimal. 


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Now is the time to refinance if you have not done so in the last 6 months.  Call us Today!


The Easterbrook Team
916-850-6050
NMLS# 22655 & 994635
John Easterbrook & Patty Aguon


20+ years of experience and knowledge in underwriting!