The Federal Open Market Committee – the policy setting wing of the Federal Reserve – concluded its monthly meeting last Wednesday (September 17).
As expected, the FOMC will stay the course. The FOMC will keep short-term interest rates at their lowest level, with the expectation that an increase will come in 2015. The target inflation rate remains 2.0%.
The FOMC will also continue to “taper” its stimulus program (quantitative easing), with the conclusion to come by Halloween (2014). QE3 helped mortgage rates reach the lowest level on record in 2012, but “tapering” has alleviated some of that downward pressure on rates.
Still, rates remain near the lowest levels because low supply of mortgage-backed securities and high investor demand has helped fill the FOMC’s place.
In other economic news, weekly jobless claims hit a fourteen-year low at 280,000, and the four-week average dipped below 300,000.
Mortgage Rate Movement
Despite the positive jobless claims report, the impression seems to be that the U.S. jobs market is soft. The Fed cut its 2015 economic growth predictions, and also dropped its September expectations. Unremarkable U.S. economic growth at home and turmoil abroad has helped maintain the low mortgage rate environment.
All eyes will be watching the jobless report this Thursday, and we will also see data on existing home sales, new home sales, durable goods orders, and GDP.
Loans Program Updates
Funding for second mortgages – Home Equity Lines of Credit (HELOC), for example – is making a strong comeback. The savvy buyer / owner can use the second mortgage to solve complicated financial situations. Read more here.
Central Coast Lending is a California mortgage broker and direct lender based on the Central Coast of California in San Luis Obispo County. Call us today at 805.543.LOAN or email us here to set up a free pre qualification. We are The Mortgage Experts: ask us anything!