Mortgage Market Guide Weekly Report for week of September 15

In housing news, the National Association of Home Builders report

This report is provided to you by FOR HomeBUYERS, an Exclusive Buyer only real estate agency. We feel it is important for you, the Buyer, to understand the broad financial picture before you purchase a home and to assist in making your decision to move forward with your purchase. It is hoped you find this article helpful.

The Fed pulled no punches after its regularly scheduled meeting of the Federal Open Market Committee, once again tapering its big Bond-purchase program. The Fed will now purchase $5 billion in Mortgage Backed Securities and $10 billion in Treasury securities each month, which is down from the $85 billion in purchases the Fed was making each month when the program first began. The Fed is expected to fully wind down the program at the end of October, and the question remains: How will home loan rates, which are tied to Mortgage Bonds, be impacted?

In housing news, the National Association of Home Builders reported that its Housing Market Index rose by four points in September to 59, its highest level since November 2005. The index measures home builder confidence in the newly built single home sector of the market, so this is a good sign for the housing industry. However, on a disappointing note, both Housing Starts and Building Permits declined in August from the previous month.

Also of importance—inflation at both the wholesale and consumer levels remains tame, as evidenced by the Producer Price Index and Consumer Price Index, respectively. This news is friendly to Bonds (and also to home loan rates), as inflation reduces the value of fixed investments like Bonds and any hint of inflation can cause Bonds and home loan rates to worsen.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Christofer Roberts
Senior Mortgage Loan Officer
Regions Mortgage
Office: 919-784-8268
Cell: 919-434-4190