Interests rate are staying put today!! The time to buy is right now!

I wanted to share a great article with you, that was given to me by my associate Adrian Webb, at Cobalt Mortgage in Kirkland. It clearly discussed the reasons that the Fed’s decided today to keep interest rates steady. This is great news for buyers and sellers!! Buyers can still afford to buy that home, and sellers will still be able to attract several buyers for their property! Get those rates locked in, and let me find you your dream home!

Thank you for the tip Adrian, and sharing Ryan Smith’s article with all of us! Such great news for the market today!. (You will find Adrian’s contact info below)

Fed says no to taper

by Ryan Smith | Sep 18, 2013

Flying in the face of market predictions, the Federal Reserve today decided to “await more evidence that progress will be sustained” before winding back its $85bn-per-month bond-buying program.

Most investors had expected the Fed to announce a modest taper today, but the institution’s policy-making Federal Open Market Committee put the kibosh on that speculation in a 2 p.m. EST statement. Despite signs of ongoing economic recovery, the committee wrote, the bond-buying stimulus will stay in place for now.

“Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy,” the committee wrote. “However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”

In a press conference at 2:30 p.m. EST, however, Fed Chairman Ben Bernanke said the Fed reserved the right to modify the amount of its bond purchases from month to month.

“Asset purchases are not on a preset course,” Bernanke said. “They’re conditional upon the data. They’ve always been conditional upon the data. … There is no fixed schedule, I really have to emphasize that. If the data confirm our basic outlook … then we could begin (to taper) later this year. But even if we do that, the subsequent steps will be dependent on the progress in our economy.”

Today’s decision is good for the mortgage industry, said Bryan McNee, vice president and senior bond analyst for MBSAuthority.com.

“The benchmark Fannie Mae 4.0 October coupon — which is what the pricing is based on — at three minutes before the Fed meeting, it was trading at 5 basis points better than the prior day. Right now it’s trading at 106 basis points better,” McNee said shortly after the Fed released its statement. “We got over 80 basis points pop on the news, and we’ll have to see how far it comes down.”

McNee said that mortgage originators could expect to see interest rates drop, but counseled against excessive jubilation.

“It’s a mixed bag, and this is why what they say is more important than what they do,” he said. “They’ve said they’re not going to taper right now, but that the amount of their monthly bond purchases is not preset going forward. What they’re effectively letting the market know is that they can adjust the amount of their monthly bond purchases without having a Fed meeting going forward. … If the economic conditions are there, they have the ability to change their monthly bond purchases at any time. You could have a taper next month. You don’t have a Fed meeting next month, but we could have a taper next month.

“Keep in mind, even if (the Fannie Mae 4.0 coupon) makes it to 100 basis points, the market has gone down, since the end of April, 400 at this point,” he added. “It’s not like it’s going back to where it was in April just because of this. This wasn’t enough for that.”

Adrian Webb MLO-811655; NMLS# 811655
CobaltMortgage | Mortgage Banker
Cobalt Mortgage Inc.
11255 Kirkland Way, Suite 100
Kirkland, WA 98033
Office: 425-605-3039
Toll Free: (800) 268-2207
Fax: (855) 800-6425
adrian.webb@cobaltmortgage.com | www.teamyeagerwebb.com

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