Kathy O'Neal
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The Federal Reserve Statement Simplified (September 21, 2010 Edition)

Putting the FOMC statement in plain EnglishThe Federal Open Market Committee met today, and as most observers expected, it voted 9-to-1 to leave the Fed Funds Rate unchanged.

The press release that was issued by the FOMC noted the slower pace of economic recovery. Even though household spending is increasing, it is hampered by other factors, most notably the unemployment situation, tight credit, and the housing market.

Not a whole lot of optimism coming from the Fed but it does expect growth that will be “modest in the near-term”.

Some would argue that the recession is over, and that growth has resumed, but at a very slow pace.

On the positive side, the Fed did make mention of strengths in the economy:

  1. Growth is continuing on a national level
  2. Inflation levels remain very low
  3. Business spending is rising

No surprise that the Fed re-stated its intention to hold the Fed Funds Rate near zero percent “for an extended period”.

Since there were no surprises, the mortgage market’s reaction to the release has been neutral. Mortgage rates in Virginia seem to be unchanged as of today.

The FOMC’s next meeting is scheduled for November 2-3, 2010.

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Mortgage Rate Shopping: Reactions to Fed’s June Meeting

FOMC June 2010 MinutesMortgage rates hit all time lows this week, at least according to Freddie Mac.

And they may be staying low for awhile, but then again who can predict.  A good run of economic news could send them creeping up.

Since the Fed released its June 2010 meeting highlights, mortgage rates have been dipping, owing to the tone and language of the report.

The Fed’s report is page upon page of stats, and other somewhat dense descriptions of the U.S. economy, along with discussion of the give and take of opinions among the Fed members.

Some highlights from this report include:

  1. An expectation of below normal growth through 2012
  2. A less positive picture on employment
  3. Credit conditions easing only very slowly

This is not great news overall, but it may bode well for mortgage rates.

If you have a re-fi or a home purchase on the horizon, consider getting that mortgage rate locked in now.  Forget the stress of trying to second guess what is next.

And of course, if you are considering a move to the Northern Virginia area or a home sale or purchase in Northern Virginia, I invite you to take a quick minute and watch our video on how we serve our clients.  It is an honest view on how we serve home buyers and sellers.  Click on “Our Story:  In the Voice of Our Clients.”

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