Houses (of Congress) in Order

This month’s Federal Open Market Committee meeting begins tomorrow and culminates on Wednesday at noon our time with the reading of the monetary policy statement. Some speculate that the Fed will announce a formal plan to ease out of the five year long economic stimulus plan known as quantitative easing.  My viewpoint is where this is the last statement of outgoing Chair Ben Bernanke, no such plan will be announced.  Is it because the economy is floundering?  Kinda, but not really.  Data shows that we have hit bottom and begun to turn the corner (please excuse me for mixing my metaphors—guess I’m still feeling cheeky for saying “kinda”) and we will have to return to normalcy sooner rather than later.  I believe though that Mr. Bernanke will want to be remembered for all that has been done on his watch, and not as the guy who prematurely turned off the lights when the show was still going on.

Also something to consider is the political pressure for the Fed to keep rates low.  Think about it: as of this morning the US Government owes $17,236,033,598,592.96, and can’t get its spending under control.  According to the Treasury Department the average interest rate paid by the US Government is 2.543%, which equates to $438,312,334,412.22 in interest every year. The National Debt has continued to increase an average of $2.65 billion per day since September 30, 2012!  Rates going up will affect the government more than it will someone who has their proverbial house in order.

In order to get your house in order, why not look at a 15 year loan with rates still at 3.5%? (APR will vary and is dependent on down payment, loan amount, the presence of mortgage insurance, etc.)

The Hazy Shade of Monetary Policy

I think that this week’s weather is exactly what Paul Simon (or The Bangles if you are younger) envisioned by “the sky is a hazy shade of winter”—except that there is more than just “a patch of snow on the ground”.




Like the weather, the markets are quiet—if not cold—in the absence of earth-shattering economic data today and ahead of next week’s Fed meeting where there exists a 25% chance of QE tapering to begin.  Will the Federal Open Market Committee see that our economy is in fact improving enough to justify scaling back their purchase of long-term investment vehicles and consequently allowing interest rates to return to more natural levels?  Or do they, like 83% of those polled by CNBC this week, still rate the economy as “fair/poor” despite increasingly (though incrementally-challenged) better numbers reflecting economic growth?  Beauty, they say, is in the eye of the beholder.  And in this case, the 12 voting members of the FOMC (comprised of five Reserve Bank presidents and seven Fed Governors) are the beholders of the future of interest rates—if they can see through the haze that is.

Floundering Fish and Fixed Rates

Good News across the board this morning: Initial Jobless Claims are up 68,000 this week; Retail Sales are up 0.7%; Export Prices are up 0.1% and Import Prices are down -0.6%; Global Growth expected at 3.4% for 2014; Foreclosure Inventory is down 15% from last year at this time. They say that sometimes good news is bad news and that seems to be the way that the markets perceive it today. Stocks are down across the board while Bonds are up, but bouncing along a very slippery floor of support like a freshly landed fish looking for a way back down into the water. Make no bones about it, rates are on the rise. The markets have built in a 25% chance of tapering beginning next week at the Fed meeting. I don’t see it happening in spite of today’s rose colored glass outlook.


30 year rates still in the 4-4.5% range.

Wall Street Gamblers

Budget negotiators unveiled an agreement yesterday to cut spending by about $63 billion over two years, cutting the deficit by $23 billion.  Gamblers cloaked as Traders on Wall Street see this as further stimulus for the Fed to bow out of the quantitative easing program (AKA: tapering) all the more quickly and have punched the “sell” button more than the “buy” button today.  As a result of the speculation, pricing has declined for both Stocks and Bonds, putting more upward pressure on interest rates.  This is not a surprise to you, the faithful reader of my antic soothsaying as I have mentioned, nay demonstrated with skiers, sledders, and even a Disney attraction that rates are on the rise.  Alas, it is not too late to capitalize on today’s prime 30 Year offerings in the 4.0-4.5% range (APR will be higher, depending on the loan and down payment amounts–as closing costs and the presence of mortgage insurance affect each loan differently.)

Back to Work

Another Happy Friday to You,

The highly anticipated Jobs Report was released this morning, revealing that employers created 203,000 job last month, above the 188,000 expected and shockingly close to the ADP report released earlier this week (they are notoriously incongruent). The Unemployment Rate fell to a 5-year low of 7% for November and they also revised October down to 7.0% as well.

The Hourly Earnings Rate ticked up to 0.2%, showing that the 93% of the population who is employed is making more money that we were last month, though marginally. Contrast that with a separately measured index, Personal Incomes, which slipped in October by -0.1%. We are not letting that stop our proclivity for reckless abandonment of common sense however; Personal Spending marched up 0.3%. Consequently This Christmas should be 1/3% merrier than the last!

Though they’ll end the week higher, mortgage rates managed to dodge a bullet with the rosy employment outlook. 30 Year interest rates are 4.0-4.5%. Along with higher interest rates on the horizon, a slew of underwriting requirements imposed by our preeminent elected officials (the same ones who contrived the Affordable Care Act) will make it more of a challenge to qualify for financing to purchase your next home starting in January. Get in touch with me sooner rather than later to strategize.

If you are interested in a very useful, very simple (though very comprehensive), and very free loan calculator with up to the minute interest rates for a variety of loan programs, click on this link from your own mobile device: It’s mine so there is no spamming or other baggage associated with it. And if you hate it, you can delete it at any time.

Mortgage Banking

Whether you are buying a home, acquiring investment properties, seeking to pay off your mortgage more quickly, consolidating your debt, or just lowering your payment, my job is help you achieve your financial goals, and  make your life better!

To that end, I Promise to:

    • Be honest and ethical
    • Do what I said I would: rate, fees, etc.
    • Return your phone calls, emails, texts, etc. in a timely manner
    • Help your friends, family members, neighbors, and co-workers
      with the same integrity


Zillow Home Values/Christmas Social

Happy Friday!

A prominent home value website shows that prices bumped up 1.2% during the peak home buying season of June through September. They show that values only increased 6.4% from last September, and prognosticate that home values will only rise 3.8% by next September. While certainly better than a divination for diminution, the calculation is only roughly half of the gain that other market mystics predict.

Interest rates are still trending upward despite the affirmation for continued Federal intervention by outgoing and incoming Fed Chairs. Government loans are still stellar at 3.75% for 30 year and 3.375% for 15 year, while Conventional loans are 3.375% for 15 and 4.25% for 30 year programs respectively. The APR will be higher—especially on FHA—and varies with the down payment and loan amounts. I will be more than happy to run specific numbers for you if you are looking for something.

We are having an open house in our building in a couple of weeks and hope that you can come:

Mortgage Market Movement 11/08/2013

Happy Friday,

The big headline today is that 204,000 new jobs were credited last month, more than double the 100,000 expected. Oddly enough, the Unemployment Rises to 7.3% from last month’s 7.2%. Stocks are marginally (DOW up 97), but the big news is the bond market. The 10 Year yield spiked instantaneously from 2.6% to 2.75% as prices opened down 90bps.

Mortgage interest rates are up .125% across the board, from 3.875% for 30 year FHA to 4.375% for Conventional. 15 year rates are still down at 3.375%.