FOMC Minutes and Tid Bits

Yesterday the Fed released minutes from last month’s FOMC meeting. The minutes reveal the committee is debating easing or ceasing the purchase of mortgage backed securities before the end of this year. 

A number of participants stated that an ongoing evaluation of the efficacy, costs, and risks of asset purchases might well lead the Committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred.

The Fed cannot continue to keep mortgage rates at their manipulated lows forever. Industry experts estimate that if the Fed was not involved with keeping mortgage rates low with the buying of mortgage backed securities, rates would be closer to “jumbo” rates (about a full point higher in rate).

Other points I of interest from the minutes – at least to me 🙂  

…some participants were concerned that the recent increase in the payroll tax could have a significant negative effect on spending, particularly on the part of lower-income consumers.

Effective the beginning of this year, did you notice your pay check is 2% less? Congress allowed the expiration of the payroll tax cut to expire during the “fiscal cliff”. During 2011 and 2012, Americans caught a break and only paid 4.2% of their incomes for social security; we’re now back to paying 6.2%. If your monthly gross income is $5000, then your monthly take home pay is $100 less than what you had before this payroll tax.

If you’re a home owner who has not refinanced in the last year, you may want to contact your local mortgage professional to see if it makes sense. Reducing your mortgage rate can help off set the payroll tax and reduce the amount of interest you’re paying on your mortgage.  Click here if you would like a rate quote for homes located anywhere in Washington state.

Participants remarked on the ongoing recovery in the housing market, pointing variously  to rising house prices, growth in residential construction and sales, and the lower inventory of homes for sale. A number of participants thought it likely that higher home values and low mortgage rates were helping support other sectors of the economy as well, and a couple saw the housing market as having the potential to cause overall growth to be stronger than expected this year…

In the greater Seattle area, home prices continue to increase and I’m hearing from home buyers that they wish there was more inventory to chose from. If you’ve been considering selling your home, this could be a good time to meet with a real estate agent. If you need me to refer one to you, I’m happy to do so! 

….Nonetheless, it was noted that mortgage credit remained tight and the fraction of homeowners with mortgage balances exceeding the value of their homes remained high.

Those seeking a mortgage, whether it’s for refinancing or buying a home do need to qualify and it is a “full doc” process. However, it’s not impossible. You need to be prepared to provide all income and asset documents, have steady employment and good credit. If you are considering buying a home (or even refinancing) in the next 12 months, I recommend starting with a preapproval now. 

Home owners who are still upside down with the loss of their home equity may still be able to take advantage of today’s low rates if:

  • they qualify for the Home Affordable Refinance Program (HARP 2.0). This is eligible for conforming mortgages securitized by Fannie Mae or Freddie Mac prior to June 1, 2009 on primary residences, second homes or investment properties. Or…
  • the existing mortgage to refinance is FHA, an FHA streamlined refinance may be possible for primary residence or investment properties. Or…
  • the existing mortgage is VA or USDA. 

If you are looking at buying a home or refinancing anywhere in the state of Washington, I’m happy to help you!

Mortgage rate update for the week of December 31, 2012

Happy last day of 2012! Although this is a short week due to the New Year holiday, it’s packed with economic data that may impact mortgage rates, including The Jobs Report on Friday. Here are a few of the scheduled events for this week:

Monday, December 31, 2012: Last day for Congress to avoid the “fiscal cliff”.

Tuesday, January 1, 2013: HAPPY NEW YEAR! 

Wednesday, January 2, 2013: ISM Index and FOMC Minutes

Thursday, January 3, 2013: ADP National Employment Report

Friday, January 4, 2013: The Jobs Report

Just a quick reminder, I am on a short vacation and will be returning to work on January 3, 2013.


What May Impact Mortgage Rates the week of December 24, 2012

With the holidays upon us, we don’t have a lot of economic data scheduled for this week. Markets continue to be impacted with the “fiscal cliff” deadline approaching and Congress home for the holidays. Should a deal not come together to avoid falling off the “fiscal cliff” mortgage rates may actually improve as stocks may take a hit. The Bond and Stock Markets will close early today and reopen on Wednesday after the Christmas holiday.

Here are a few of the economic indicators scheduled for this week.

Tuesday, December 25: Merry Christmas!

Wednesday, December 26: S&P/Case-Shiller Home Price Index

Thursday, December 27: Initial Jobless Claims; New Home Sales; Consumer Confidence

Friday, December 28: Chicago PMI and Pending Home Sales

Next week will be another short week with the New Year holiday. ‘Tis the Season! 

From my home to yours, we wish you a very Merry Christmas and Happy Holidays!

What may impact mortgage rates the week of December 17, 2012

Boris-S-WortMy apologies for not getting this information posted yesterday, as I try to on every “working” Monday. We had weather related issues and I’m glad to say, all is well now.

This week, mortgage rates will be following the drama surrounding our financial “fiscal cliff”. If traders see optimism that we will avoid “going over the cliff”, you may see mortgage rates trend higher.

Here are a few of the economic indicators scheduled to be released this week:

Monday, December 17: Empire State Index

Tuesday, December 18: NAHB’s Home Builder Confidence (this came in at the highest levels since 2006!)

Wednesday, December 19: Building Permits; Housing Starts

Thursday, December 20: Initial Jobless Claims; Gross Domestic Product (GDP); Existing Home Sales; Philadelphia Fed Index

Friday, December 21: Personal Consumption Expenditures (PCE); Personal Income; Consumer Sentiment (UofM)

As someone who grew up in Renton, a suburb of Seattle, whenever I hear the phrase “Fiscal Cliff” I have an image an evil villian like, Boris S. Wart. Boris S. Wort was the second meanest man in the world and was a character on the J.P. Patches show that many of us watched growing up.

PS: If I can provide you with a mortgage rate quote for your home located in Renton, near the Seattle dump (JP’s former home) or anywhere in Washington state, please click here.

Mortgage Rate Update for the week of November 26, 2012

Happy Cyber Monday! I hope you had a wonderful holiday weekend with family and friends. 

Here are some of the scheduled economic indicators that may impact mortgage rates for this week:

Tuesday, Nov. 27: Durable Goods Orders; Auto Sales; Consumer Confidence

Wednesday, Nov. 28: New Home Sales; the Fed’s Beige Book

Thursday, Nov. 29: Initial Jobless Claims; Gross Domestic Product (GDP); GDP Chain Deflator; Pending Home Sales

Friday, Nov. 30: Personal Consumption Expenditures and Core PCE; Personal Income; Personal Spending; Chicago PMI

It’s hard to believe that next week is December. As usual, the first Friday of the month will bring us the Jobs Report.

Remember, mortgage rates are based on mortgage backed securities (bonds). Investors will seek the safety of bonds when the stock market is not providing desired returns. Currently, the DOW is down 72 as I write this post (9:56 am). Concerns about Greece and the “Fiscal Cliff” seem to be helping all ready low mortgage rates remain at very low levels.

If you are interested in a mortgage rate quote for your home in Bellevue, Bellingham, Bainbridge Island or anywhere in Washington State, I’m happy to help you: click here.

You can see my live mortgage rate quote and other mortgage tidbits by following me on Twitter @mortgageporter or on Facebook.