Important information from one of my trusted mortgage brokers, Jill Carothers at All California Mortgage: jill@thecarothersgroup.com, 415-686-0699. The Federal Reserve Board (the Fed) is holding the first of its eight scheduled meetings for the year, which takes place at approximate six week intervals. This first meeting is particularly important, with two issues requiring our close attention. The first is the Fed’s language. In all policy statements during 2009, the Fed’s statement said that present economic conditions should “warrant exceptionally low levels of the Federal Funds Rate for an extended period.” If the Fed does not comment that the Fed Funds Rate will remain low for an “extended period,” this will signal a change in their accommodative policy. The result will be a sell off of mortgage bonds, causing home loan rates to move up. The second issue deals with the upcoming expiration of the mortgage backed security purchase program. The Fed has been saying that this program, which has ensured liquidity and low rates in home lending, will end as planned on March 31st. But there has been speculation that the Fed may add to their purchases and extend the deadline. With the expiration nearing, the Fed’s guidance on this topic will be very important to the direction of mortgage bond prices and home loan rates. So it is the language indicating the course of the Feds policy over the next several months rather than policy changes which will dictate the market reaction. The Fed Funds Rate is expected to remain unchanged at this meeting. Thank you Jill for this….together we will be keeping a close eye on the news coming from the meeting and analyzing what effect any changes could have on our clients.
Posts Tagged ‘rates’
The Federal Reserve Board Meeting
Tuesday, January 26th, 2010Are You A Buyer Or A Seller?
Sunday, November 22nd, 2009Many people ask me…how is the market? It depends if you are a buyer or a seller…sellers need to be realistic if they want to sell their homes right now. While it is a great time to be a move up client it is very hard to know how best to go about the transition: Is it best to sell first then rent while you look? Or buy what you want when you find it and then sell? Sellers have to ask themselves: How important is it to transition from this home in order to move on? Can you keep your home as an income property while enjoying the lifestyle you want? Having what one wants in their life with their family is sometimes more important than getting the most money for one’s home. These are all very individual decisions and all important to discuss.
What if you want to buy? New escrows are up 128% from October ’08. More homes have gone into escrow in October 2009 than in any other month in the last two years. Why this renewed confidence all of a sudden? Is there increased confidence in our economy? How long will low interest rates last? There is no doubt that we are in the middle of the perfect storm for buyers: Low interest rates and excellent home values (for Marin that is!). Plus, recent legislation has been passed that maintains the existing temporary conforming loan limits. This is great news for our area! The bigger problem for many of my clients right now is finding the right house. In Marin we have a shortage of inventory and each home is unique. Buyers find themselves having to be flexible when it comes to choosing their home because the homes aren’t always going to be exactly what they envision and they may need to do some cosmetic work or remodeling to have it be exactly the way they want in the neighborhood they want. Sometimes we can find them the perfect house but it is not in the neighborhood they want or vice versa. Tough situation….lately, I have been successful in finding several clients homes that are off the market. Given very specific needs, we can always find you what you want. However, we may have to look at inventory that is not currently on the market and I use my extensive networks for that. When you look for a home, what is most important to you -the neighborhood or the house?
