Eagles,
It's that time again - Federal Reserve Open Market Committee meeting!
The Fed today will begin a regularly scheduled two day meeting. The meeting will wrap up tomorrow and an announcement of the Fed decisions is released just at its conclusion. This announcement is expected around 2:15pm tomorrow.
Typically, after these announcements, we see our mortgage interest rates rise, for the short term. If you remember the last couple meetings, we have seen some surprise announcements from the Fed that were geared to prop up the real estate industry. Since we are beginning to see some recovery in our industry, and with the current level of stimulus and other plans in the works the Fed and Government has put in place, I doubt we will see any major announcement that would have our mortgage rates fall.
But the Fed has surprised me in the past.
Bottom line, if you have a buyer who has not locked in their loan, it may be advisable to have them talk to their lender, and lock in. There is an elevated risk for higher interest rates tomorrow afternoon.
Please let me know if you have any question or comments.
Thanks,
Chuck
Thanks for the heads up!
I think we have 2 opposite forces here at work. The Fed wants lower rates but the market is trying to get the rates higher. It is an interesting dynamic
Rates have been so volatile recently that they should be locked in as early as possible...
Charlie,
Yes, we are in interesting times. Our big problem is our Federal Debt is out of control. We need to find buyers for nearly 1/2 of our total national debt this year! Nine years ago, there was huge concerns over our future, with our total national debt at over FOUR TRILLION DOLLARS. Now, we are fast approaching ELEVEN TRILLION DOLLARS.
This is causing our higher interest rates.
It's no wonder our real estate market went haywire, we were just following the lead of our nation.
Come on China and Middle East, "invest" in our future! We promise we will pay you back ;-]
I will be amazed and quite frankly frustrated if the Fed continues to pursue this cheap money policy.
On a macro view, the lower rate over the past couple of months have had no impact on demand for real estate.
Trying to plunge rates lower again is only going to complicate monetary policy in the future.
I have not been a fan of these Low, Low 4.5% interest rates. It may be great for housing affordability today, but what about tomorrow? When I started in this industry in 1985, there were many people who were not able to move. Why? The mortgage rates were significantly higher than their current mortgage. For these people to move, even if they bought DOWN, their payments went UP.
With today's market- Short sales are no fun, but at least people are moving.
Thank you for the heads up. Great post