December 14, 2017

Seattle Real Estate Mortgage Rates Today 4/28/11

Seattle / Bellevue Real Estate Mortgage Rate Watch: Our Breakdown and interpretation of the Federal Reserve meeting and first ever Public address by Ben Bernanke.

First we must define the word Transitory: Definition of TRANSITORY. 1. : tending to pass away : not persistent. 2. : of brief duration : temporary.  The word Transitory was used many times by Ben Bernanke.  First, the Gross Domestic Product moving lower is transitory.  The higher cost of OIL is transitory.  The sluggishness of the economy is transitory due to the current high cost of OIL.  Lets hope that Big Ben is right when he states the cost of OIL is Transitory.  All of us are feeling the pain right now at the pump.

Second he used the “Extended Period” of time language when speaking of rates.  This does not necessarily mean that rates are going to move lower as they had in the past.  What is being interpreted by the market right now is the “Extended Period” of time represents how long rates will remain at these levels before the Federal Reserve begins the tightening of Monetary Policy which will result in their first rates hikes since the Financial Meltdown.  We are not at the point YET where they will begin to hike rates but it is being hedged by Wall Street that we may see it come by the end of this year.  Just a month ago it was over a 80% probability they would hike rates in December of 2011.

Lastly Ben Bernanke was very clear that Quantitative Easing 2 was not going to be held back and the full injection would be completed by the end of June this year.  The Fed has been able to sustain low rates by reinvesting in treasuries and bonds, but he did state for the first time that monetary tightening would come when they stop reinvesting.  This would leave the debt in treasuries and bonds to be purchased by the open market.  This brings the SUPPLY & DEMAND model.  If there is too much supply on the market yields move higher to meet the demand of what investors are looking for.  If yields move higher Mortgage Rates will move higher as we can track almost to the minute basis in today’s world of information.  One picture being painted for the future is rates do not have much room to move lower.  Across the global economies yields are moving higher to combat inflation.  The United States is currently one of, if not the lowest.  Bottom line it will all depend on what the appetite is when we get that point of not buying our own debt which has been the case since the Financial Crisis.

The job market remains soft in the report released today in initial jobless claims which came as a dissappointment to the market.  Contributing to the sluggish market is the cost of OIL.  Companies are spending more to produce the same goods and the consumer is watching how and where they are spending because of rising costs.  This all has direct impact on the Gross Domestic Product released today which reflects both Government and Consumer spending has once again slowed.  Mainly being attributed to OIL.

Good news for the housing market from Pending Home Sales which came 5.1% beating market expectations of 1.7%.  Media was playing the violin less than 30 days ago of how doom and gloom the housing market was.  Here is one side that media cannot cover and we see daily.  Relocation Companies who move talent for companies across the country are BUSY!  This time last year they were SLOW.  What they are seeing and especially in our market are companies once again HIRING.  In fact one of the relocation companies our team works with received word that this has been the BUSIEST first quarter they have had in three years.  The real estate recovery remains spotty at best.  BUT we are in a slow recovery.  YES we have to acknowledge there are still areas that are declining.  HOWEVER there are areas that have stabilized and showing signs of Growth.  Ask any family in a position to move who is concerned over education and the school their children will attend.  Good schools are attracting families.  These areas are seeing strong offers, in many cases full price within 30 days and YES in some cases multiple offers.  This is all relative to education but it still shows that the market is active and not DEAD as national media portrays it at times.  This is our opinion and observation from a street level of the market which media DOES NOT influence, the reality.

Timing is everything just as location of the home is critical. Timing in securing an interest rate, BEST rate, is working with a mortgage professional who has their pulse on the market and when best to advise and educate their clients when timing is right. Along with this key knowledge is to be on top of all of the lending and underwriting changes which seem to almost happen daily. We at the Mortgage Reel are Licensed Washington Loan Originators, serving clients with transparency, knowledge and most importantly keeping your goals in mind. How can we assist you today?

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