Jason Bernabei, TriCastle Realty
DEL MAR, July 16, 2012 -- Goooooood Monday morning San Diego!!!
Some interesting news coming out of the Federal Reserve this past week that you
should know about that has the look of an event that will effect mortgage
lending, rates, etc.
DEL MAR, July 16, 2012 -- Goooooood Monday morning San Diego!!!
Some interesting news coming out of the Federal Reserve this past week that you
should know about that has the look of an event that will effect mortgage
lending, rates, etc.
The Fed Reserve made public the “minutes”
from its June Federal Open Market Committee meeting last week, and there are
some mixed messages. The Fed Minutes is a detailed account of an FOMC meeting.
It is a joint release to the FOMC press release, and is viewed as a potential
barometer of things to come from the Fed.
The overall effect of the Fed’s apparent divide on the future of the
U.S. economy had an ill effect on mortgage rates, with the perceived
uncertainty sending rates higher across the board.
Further, there is suggestion
that another economic stimulus may be coming from the Fed. Comments like “rapid
fiscal tightening poses a downside risk to the economy” support speculation of
a potential new stimulus making headlines as the Presidential election draws
nearer this fall. While the Fed notes that recent data suggests the U.S.
economy is indeed growing, data also indicates a slow-down in growth
comparative end of last fiscal year, and earlier in 2012. The Fed Minutes
highlighted slowed growth in Euro economies, as well as in China, noting that
these circumstances abroad suggest "significant downside risks" to
the U.S. economy overall.
While the Fed’s general synopsis
is that of an expectation that U.S. growth will be "moderate over coming
quarters,” the Minutes also included the good news of home sales, and new
construction continuing to improve. Also, time was spent highlighting current
price stability in the Housing marketplace as something that can be confidently
forecasted over the next quarter and beyond. It was noted that prices are stable, and
inflation ought remain "subdued" through 2014.
In addition, there was
discussion about whether the Fed is missing its dual mandate of low inflation
and low unemployment. Several Fed members discussed the need for new stimulus
to raise employment and to raise the rate of inflation. This action could occur
as soon as next month.
If the stimulus was enacted,
mortgage rates would likely rise because inflation, in general, is a threat to
low mortgage rates.
The next Federal Open Market
Committee meeting is a 2-day affair scheduled for July 31-August 1, 2012. Stay
tuned, and if you are thinking of buying or refiing in time to take advantage
of these historically low rates, right now or the very near future might just
be the sweet spot to make your move.
Feel free to hit me up, Jason Bernabei, if you
are looking to refi, or need a purchase loan, or are looking to buy or sell
property, or if you just want to shoot the breeze on Housing. Until then, you
can check me out each and every Monday on www.therealtyinsiders.com for more,
and be sure to tune in to see myself, and other local industry professionals
talking all things real estate and Housing on The Realty Insiders, the ONLY
real estate show in town!
Jay's Outlook: partly cloudy
Jason Bernabei, TriCastle Realty
