My Life as a Realtor

FED Rate Change Update

Holding Pattern…

After having lowered the FED Funds rate at seven consecutive meetings the FED has again left the rates in a holding pattern. Citing ‘uncertain’ inflationary signals in the marketplace and the FEDs desire to let the market forces continue to work they are standing pat with their current rate.

What this means is that mortgage rates will continue to be mainly influenced by the overall market. If the FED had chosen to raise the FED Funds rate, mortgage rates would have reacted to the downside, since raising the FED Funds rate is an anti-inflationary move.

Remember, Mortgage Bonds and Mortgage Rates have an inverse relationship. So, we need to focus on what moves the bonds to anticipate how rates will react. Therefore with a status-quo move by the FED we should see bonds stay in the holding pattern as well.

However, bonds will also be pushed and pulled by the broader economic market. That is why today we see them sell off because Freddie Mac reported a larger than expected loss.

We’re watching the reports and tracking the FED. We’ll let you know what information pops up that will impact rates in the long term. But for right now, if you have borrowers who think rates are going to fall in the near future our advice would be for them to lock sooner rather than later.

With changes to FHA in the new Housing Bailout Bill, and now the FED holding steady it is time for buyers to get off the fence.

Here are the quotes!

"Necessity is the mother of taking chances. "
-- Mark Twain, author

"Follow your instincts. That's where true wisdom manifests itself. "
-- Oprah Winfrey, Talk Show Host

"One person can make a difference. You don't have to be a big shot. You
don't have to have a lot of influence. You just have to have faith in
your power to change things."
-- Norman Vincent Peale, Clergyman

"A leader, once convinced a particular course of action is the right
one, must have the determination to stick with it and be undaunted when
the going gets rough. "
-- Ronald Reagan, 40th U.S. president

"No one can defeat us unless we first defeat ourselves."
-- Dwight Eisenhower, 34th President of the United States

"If you can dream it, you can do it. Always remember this whole thing
was started by a mouse."
-- Walt Disney, Animator, Film Producer

"Don't be afraid to give your best to what seemingly are small jobs.
Every time you conquer one it makes you that much stronger. If you do
the little jobs well, the big ones tend to take care of themselves. "
-- Dale Carnegie, Author

"The future belongs to those who see possibilities before they become
obvious. "
-- John Sculley, Former CEO of Apple

"Winning isn't everything. Wanting to win is."
-- Catfish Hunter, Baseball Player

"Perfection consists not in doing extraordinary things, but in doing
ordinary things extraordinarily well. "
-- Angelique Arnauld, Abbess of Port-Royal