Financial Reports Archives – Page 110 of 112

17

Mar

Financial Reports

Fed Policymakers Make Interesting Decision on Interest Rates

Fed Policymakers Make Interesting Decision on Interest Rates According to a press release by the Federal Reserve, the Federal Open Market Committee (FOMC), the current target federal funds rate will hold steady at 0.25 to 0.50 percent. Committee members cited positive developments in the U.S economy including jobs growth, stronger labor markets and gradually increasing inflation. In addition, stronger housing sector and household spending were also noted as positive signs for the economy. Committee members cited risks associated with global economic and financial developments as a concern.

FOMC members are guided in decision making by the Federal Reserve’s dual mandate of maximum employment and price stability. Inflation remains below the committee’s longer-term goal of 2.00 percent; FOMC members attributed slow inflation growth to lower energy prices. The Fed described its current monetary policy stance as “accommodative” and expects it to remain so until inflation reaches 2.00 percent.

Analysts said that the Fed has scaled back its forecast for rate increases from four increases to two increases in 2016, but any actions will depend on FOMC review of current and expected domestic and global factors. Fed Chair Janet Yellen previously cited turbulent market conditions as “significantly” tightening financial conditions due to lower stock prices.

Fed Chair Janet Yellen‘s Press Conference

Fed Chair Janet Yellen explained policy makers’ decision not to raise the target federal funds rate in a press conference after the FOMC statement. Chair Yellen responded to media representatives’ questions about FOMC’s views on inflation and unemployment, zero or negative interest rates and uncertainty about China’s economy

Ms. Yellen cautioned against over-emphasis of the relationship between unemployment and inflation as employment rates only modestly impacts tracking inflation indicators as they relate to wages and prices. In her remarks about the decision not to raise the target federal funds rate, Chair Yellen cited uncertainty about China’s economy as a factor in the decision not to raise the benchmark federal funds rate.

The U.S. economy is strengthening as Europe and Japanese economies wane. Chair Yellen indicated that although global economic decisions influence U.S. monetary policy, that U.S. decisions are not based solely on global economic and financial developments.

In response to a question about whether the FOMC has considered the effects of zero to negative interest rates used by Japan and other nations, Chair Yellen said that committee members were not actively considering or discussing negative interest rates in view of improving economic conditions. Ms. Yellen said that Japan incorporated negative interest rates but did not realize the desired effect of increasing inflation.

Media analysts said that a rate increase in April’s FOMC meeting seems unlikely, but with world-wide economic conditions changing quickly, such, forecasts can’t be cast in cement.

14

Mar

By support

Financial Reports

What’s Ahead For Mortgage Rates This Week – March 14, 2016

What's Ahead For Mortgage Rates This Week - March 14, 2016 Last week’s economic news included Fannie Mae’s Home Purchase Sentiment Index along with weekly reports on mortgage rates and new jobless claims. The City of Detroit also announced a program to help would-be buyers purchase homes that do not qualify for mortgage loans due to severe damage.

Fannie Mae: Home Buyer Sentiment Index Rises

Fannie Mae’s Home Buyer Sentiment Index (HBSI) gained 1.20 percent for an overall reading of 82.70 percent for February. The index reading is calculated using responses to several questions contained in Fannie Mae’s National Housing Survey. HBSI components include consumer responses to questions about whether it’s a good or bad time to sell or buy a home, consumer expectations concerning whether home prices and mortgage rates will rise, whether respondents expected to keep or lose their jobs, and consumer outlook for their income to significantly increase year-over-year.

The HBSI is designed to assess consumer attitudes about housing markets and their decisions about buying a home.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported that average mortgage rates rose across the board last week. The average rate for a 30-year fixed rate mortgage rose four basis points to 3.68 percent; the average rate for a 15-year mortgage rose two basis points to 2.96 percent and the average rate for a 5/1 adjustable rate mortgage was eight basis points higher at 2.92 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims dropped to a five-month low last week with a reading of 259,000 new claims filed as compared to expectations of 275,000 new claims and the prior week’s reading of 277,000 new claims. New claims readings under 300,000 new claims indicate a healthy labor market; new claims readings have held below the 300,000 benchmark for more than a year. The lowest reading of 256,000 new jobless claims occurred in October 2015.

City of Detroit Addresses Problems with Ravaged Homes

The City of Detroit announced a program designed to facilitate the purchase and rehabilitation of vacant and damaged homes that do not meet appraisal requirements for traditional home loans. While many markets have recovered from the Great Recession, housing markets such as Detroit have languished due to the lack of financing options. The program offers mortgages to cover the home purchase and second mortgages up to $75,000 for repairs and renovation. Program administrators say they plan to issue 1000 loans over the next three years. This type of program may help struggling housing markets recover while providing homeownership opportunities to those who could not otherwise afford to buy a home.

What’s Ahead This Week

This week’s scheduled economic events include the National Association of Home Builders/Wells Fargo Housing Market Index, federal reports on housing starts and building permits issued. The Federal Reserve will release its usual post-meeting statement after its Federal Open Market Committee meeting. Fed Chair Janet Yellen will also hold a press conference.

07

Mar

By support

Financial Reports

What’s Ahead For Mortgage Rates This Week – March 7, 2016

Week in Review

Last week’s scheduled economic news included reports on pending home sales, construction spending and several jobs related readings including ADP Payrolls, the government’s Non-Farm Payrolls and the national unemployment rate.

Mortgage Rates, Weekly Unemployment Claims Rise

Mortgage rates rose across the board according to Freddie Mac’s weekly report. The average rate for a 30-year fixed rate mortgage rose two basis points to 3.64 percent; the average rate for a 15-year fixed rate mortgage rose by one basis point to 2.94 percent and the average rate for a 5/1 adjustable rate mortgage rose five basis points to 2.84 percent. Discount points were consistent at 0.50 percent for all three types of home loans.

Weekly jobless claims also rose to 278,000 new claims as compared to expectations of 270,000 new claims and the prior week’s reading of $272,000 new jobless claims. While an increase in new unemployment claims may seem discouraging, new claims for unemployment remain near pre-recession lows.

The four-week rolling average of new jobless claims dropped by 1750 claims to 270,250 and reached its lowest reading in three months. Analysts view the four-week reading as more reliable than week-to-week readings that can be volatile.

Pending Home Sales and Construction Spending

In other news, pending home sales fell by 2.50 percent as compared to December’s reading. Analysts expected an increase in pending sales of 0.50 percent; December’s reading was 0.10 percent higher than for November. Pending home sales represent sales contracts that have not yet closed and are considered an indicator of future closings and mortgage activity.

Home sales have been impacted in recent months by a shortage of available homes; this creates a backlog of would-be buyers who can’t find homes they want to buy and also causes rapidly escalating home prices in desirable areas. Bidding wars and cash sales can sideline buyers who can’t pay cash or are whose offers are outbid.

Analysts say that new home construction is a key component of easing the housing shortage. Construction spending increased by 1.50 percent in January, but month-to-month spending for residential projects was flat in January. Spending for residential projects was 7.60 percent higher year-over-year.

Labor Reports Reflect Stronger Economy

Federal and private sector reports on jobs indicate that job growth continues. The Department of Commerce reported that Non-Farm Payrolls grew by 242,000 jobs in February, which was higher than expectations of 195,000 new jobs and January’s reading of 172,000 new jobs. According to ADP, which tracks private sector payrolls, 214,000 new jobs were created in February as compared to expectations of 185,000 new jobs and January’s reading of 193,000 new jobs.

Improving jobs markets are a positive indicator for housing markets as stable employment is important to home buyers’ ability to qualify for mortgages. The National Unemployment Rate remained stable in February with a reading of 4.90 percent; the expected reading and prior month’s reading were also 4.90 percent.

What‘s Ahead

Next week’s scheduled economic reports include the NFIB Small Business Index and February’s Federal Budget along with regularly scheduled weekly reports on mortgage rates and new unemployment claims.