What Home Buyers Need To Know for July 15th, 2013
The most noteworthy economic event last week was the Fed’s release of the June FOMC minutes and affirming the Fed’s previous statement concerning its measured exist policy for ending Quantitative Easing (QE3). The minutes indicated that about half of the Board of Governors wanted to end quantitative easing (QE3) policy by year end while remaining members preferred to end the program sometime in 2014. Either way, the Fed’s monthly purchase of $85 billion in Treasury securities and mortgage-backed securities (MBS) appears numbered as the economy improves and that’s a good thing.
Furthermore, the minutes also revealed that the Fed will not be selling off its MBS as QE3 ends to help maintain a relatedly uneventful exist and hopefully prevent mortgage rates from increasing based on these factors alone.
Financial markets showed little reaction to the Fed minutes. The Dow Jones Industrial Average saw a quick gain of about 40 points and The Wall Street Journal interpreted it as a non-event by investors grown accustomed to the eventual end of the QE3.
Current Federal Funds Rate remains at 0.00 to 0.25 percent and expected to remain so for some time to come after QE3 ends; further assisting the economic recovery to move forward.
Mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage moved to 4.51 percent from last week’s 4.29 percent. The average rate for a 15-year fixed rate mortgage rose to 3.53 percent from 3.39 percent. Discount points for both types of loans rose from 0.70 percent to 0.80 percent.
For those of you who might be purchasing your first home and/or don’t plans on living in the home you’re purchasing for more than five years, ask your lending about the FHA/VA Hybrid 5/1 Adjustable Rate Mortgage (ARM). It’s available for both FHA & VA standard loan programs as well as the FHA 203K mortgage, while a 30 year rate for these ARM’s have been reported at around 3.75 percent with discount points of 0.70 percent.
What’s Ahead for the Week
Today Retail Sales for June was released with a mixed bag of news for consumer spending.
Tuesday’s news brings us the NAHB/Wells Fargo Housing Market Index for July.
On Wednesday, Housing Starts for June will be released.
Thursday’s news includes Weekly Jobless Claims and Leading Economic Indicators.
If you’re interested in learning more about home ownership in your city be sure to visit “The Home Buyer’s Korner” to the right our blog and engage our local network members.