Federal Reserve Announcement:
Music to the Ears
The Federal Reserve's decision to forego a slow-down of bond-buying caught most by surprise yesterday. That included the Dow and the S&P. It was "music to the ears" ... as after the Fed announcement made by Fed Chair Ben Bernanke, both rocketed to record highs.
The majority of analysts had expected the Fed to implement a slow withdrawal of its bond-buying program ... a program that presently sees about $85 BILLION worth of bonds being purchased each month. All indications had pointed to it.
But my hope is that this delay will promote and kick-start an economy that had, as of late, been sputtering a bit. At least in my world of mortgage lending, the last couple of weeks definitely indicated that home buyers were a bit anxious. Those with hopes of refinancing, had all but disappeared.
If yesterday's Fed move was meant to counteract a slowdown and re-stimulate the housing market ... it worked. Interest rates reacted and moved downwards.
If you pair this Fed announcement along with the report released by the Census Bureau showing new building permits and housing starts a bit lower than had been projected ... you understand why the Fed's decision and announcement is seen as such good news by housing professionals ... or those hoping to buy or Refinance a home.
The rising interest rates seen over the last month or so (a direct result of the prediction that the Fed would taper its bond-buying soon) has definitely taken a toll. Besides the obvious negatives that directly effect hopeful new home buyers, homebuilders, and real estate professionals ... there's the fact that fewer housing starts stagnates the economy through the lack of job growth and spending power. Those negatives play heavily on interest and activity seen in the future months.
At present, homebuilders are still expressing confidence at levels not seen for over 8 years. But concerns were definitely being raised over what was being seen and heard over the last weeks from the Fed.
The fact that the Fed recognized that their stimulus was still needed and changed course on their actions (at least in the short-term) is a huge positive. My phone is already ringing because of the Fed's action.
My suggestion to anyone that is sitting on the fence regarding a Chicagoland home purchase is ... pick-up the phone and contact me, or visit my website now. Let's discover or re-visit your options for home buying with new, current interest rates. At minimum, inquire as to your possibilities ...
* Hoping to Buy or Refinance a Home in the Lincoln-Way Region, Will County, DuPage County, or elsewhere in the Chicagoland area? Contact me now! I'll be happy to hear from you and put my 36 years of mortgage experience and expertise hard to work on your behalf.
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