FAVORABLE FED MEETING- 9/23/16

Financing

                       Mortgage Market News for the week of September 23, 2016
 

                                                          FAVORABLE FED MEETING


Investors liked what the Fed said, or didn't say, following Wednesday's meeting. Both stocks and bonds reacted favorably. The economic data had little impact. As a result, mortgage rates ended the week lower.

As expected by most investors, the Fed did not raise the federal funds rate. The Fed explained in its post-meeting statement that the case for a rate hike "has strengthened," but Fed officials decided to wait for "further evidence of continued progress toward its objectives." Notably, Fed officials remain divided about the appropriate timing to tighten monetary policy. In a rare occurrence, three out of ten voting Fed members dissented from the decision because they wanted a rate hike to take place at this meeting. Conversely, three Fed officials indicated in their forecasts that they do not see a need to raise rates at all this year. Investors were pleased that the Fed did not come out more strongly in favor of tighter monetary policy, and mortgage rates improved following the meeting.

The housing data released over the past week was mixed. After reaching a multi-year high this summer, sales of previously owned homes in August declined for the second straight month. According to the National Association of Realtors, low levels of inventory are holding back home sales in many regions. Inventories of homes for sale declined 3% from July and were 10% lower than a year ago.

There are signs that building activity for single-family homes may pick up in coming months, however. In August, building permits for single-family homes increased 3.7% from July, which was the largest monthly increase since June 2014. In addition, the NAHB home builder confidence index jumped to 65 in September, which matched the highest reading since 2005.

 
CALENDAR

Mon 9/26 New Home Sales

Wed 9/28 Durable Orders

Fri 9/30 Core PCE


WEEKLY CHANGE

Mortgage Rates fell 0.04

Dow rose 200

NASDAQ rose 75


 
 
 
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Shawn Beaudoin
Mortgage Loan Officer
941.524.1128
Email me  |  Visit my website
NMLS ID: 1431986
FAVORABLE FED MEETING
Investors liked what the Fed said, or didn't say, following Wednesday's meeting. Both stocks and bonds reacted favorably. The economic data had little impact. As a result, mortgage rates ended the week lower.

As expected by most investors, the Fed did not raise the federal funds rate. The Fed explained in its post-meeting statement that the case for a rate hike "has strengthened," but Fed officials decided to wait for "further evidence of continued progress toward its objectives." Notably, Fed officials remain divided about the appropriate timing to tighten monetary policy. In a rare occurrence, three out of ten voting Fed members dissented from the decision because they wanted a rate hike to take place at this meeting. Conversely, three Fed officials indicated in their forecasts that they do not see a need to raise rates at all this year. Investors were pleased that the Fed did not come out more strongly in favor of tighter monetary policy, and mortgage rates improved following the meeting.

The housing data released over the past week was mixed. After reaching a multi-year high this summer, sales of previously owned homes in August declined for the second straight month. According to the National Association of Realtors, low levels of inventory are holding back home sales in many regions. Inventories of homes for sale declined 3% from July and were 10% lower than a year ago.

There are signs that building activity for single-family homes may pick up in coming months, however. In August, building permits for single-family homes increased 3.7% from July, which was the largest monthly increase since June 2014. In addition, the NAHB home builder confidence index jumped to 65 in September, which matched the highest reading since 2005.