November 23, 2017

Seattle Mortgage Reel, Weekly KickOff, June 22, 2009

All eyes on “Big Ben Bernanke”

The much anticipated and speculated two day Federal Reserve meeting is set to being Tuesday, June 23rd.  Every word Ben Bernanke speaks will cause volatility in the markets including mortgages.  It has been highly debated that he will mention increasing the short term interest rates for the first time since June 29, 2006.  For all home owners with Home Equity Lines of Credit beware the beginning of higher rates is now beginning.  

What we are really looking to hear is if the Federal Reserve will allocate more money to fund Mortgage Backed Securities.  

Keep in mind mortgages are really on sale right now.  The Federal Reserves intervention to provide a purchasing vehicle has created a stable platform for mortgages to evolve, take the Federal Reserve out of it and the market will be at FULL PRICE, yes much higher interest rates.  For the last few weeks we have seen interest rates take a jump higher and remained above 5.00%.  Lets look at why this has happened.  Since Memorial Day the market has been in Bond Roll Over season.  Bonds coming to maturity and auctioned off in the open market have not been met with buyers other than the Federal Reserve.  With such a lack of buyers in Long Term bonds yields spiked and along with this spike home loan rates increased.  

Announcements coming from the two day Federal Reserve meeting will be key in bringing interest rates lower, currently the floor of resistance has been set at 5.00%.  This again another point we made many months ago that rates are not going to go below 4.50% and may not be below 5.00% for very long.  Mortgages react adversely to rising rates, the concerns of inflation will not help to sustain low rates.  

Stay tuned for Breaking News updates this week!

We will be posting updates on the reactions of the market and how it affected home loan rates.

Timing will be key.

 If you are looking for a mortgage professional who has the pulse on the market and can offer sound advice for your most valued investment, your home, then please contact us for a free consultation.  We look forward to being of service.




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