Atlanta Mortgage News January 1 2014
Thanks again to Shelter Mortgage 6 for the Atlanta Mortgage News Jan 1 2014 that you see below. If you have questions about where interest rates are going in 2014 – join the crowd. No one can predict interest rates – but all the economic indicators point to rising mortgage interest rates in 2014.
NOW is the time to buy or sell an Atlanta Georgia home. Call or text me at 404-229-2995 and we can get the process started.
1. All of us at Shelter Mortgage wish you and your family a safe and Happy New Year!
2. 30 Year Rates started the year at 3.375% and finish the year at 4.625%. Most projections are for rates to continue to push up in 2014 and break through the 5% barrier for the first time in three years.
3. The mortgage market was quiet during Christmas week. The economic reports released were mostly stronger than expected resulting in mortgage rates ending the week a little higher.
4. Per the Commerce Department, New Home Sales dipped 2.1% in November, however, this was from a level in October which was revised substantially higher. In fact, the revised October reading was the highest level since July 2008. November New Home Sales were 17% higher than one year ago. This was another in a string of recent housing market reports which provide reasons to be optimistic heading into 2014.
5. Fannie Mae announced a major change last week pertaining to the use of a Power of Attorney (POA). A POA may not be used to sign documents if no other borrower executes the loan documents in person in the presence of a notary public, unless the POA is either the borrower’s attorney-at-law or the borrower’s relative. In addition, unless they are the borrower’s relative, no employee of the lender, closing attorney, or title company or any real estate agent with a financial interest in the transaction or any person affiliated with such real estate agent may act as a POA.
6. On December 18, the Fed announced that it will begin to scale back its bond purchases. The added demand from the Fed for mortgage-backed securities (MBS) has been a major factor helping to keep mortgage rates low, so a reduction in bond purchases is clearly negative for mortgage rates.
Considering this, it is interesting to see that mortgage rates have moved only a little higher since the Fed announcement. In other words, the taper was almost completely priced in to mortgage rates ahead of the actual announcement. By contrast, the reaction in the stock market to the Fed statement was much larger. Investors were pleased that the Fed intends to hold the fed funds rate low until much greater labor market improvement is seen, and the Dow stock index has climbed roughly 600 points to a record high.
7. Rate Update: As we roll into 2014, the future of the economy will continue to be debated. There is no certainty in predictions but the recent data and Fed statements clearly show signs of improvement. The uncertainty is whether the economic improvements are an indication of a solid footing or simply the result of the large Fed purchases often termed a “sugar high.” Data can be used to support both sides of the debate. What we can be certain of is the fact that mortgage interest rates are likely to remain volatile while the Fed continues to adjust their asset purchases.
Historically, mortgage interest rates seem to improve slowly. In contrast, when rates increase, it is often quickly and furiously. One negative day often erases a week of positive improvements. Of course, even that maxim was tested the last few months of last year as significant market swings were often seen in very short spans of time.
It is possible for mortgage interest rates to remain favorable considering the Fed still wants to keep them relatively low and continues to spend billions of dollars monthly to do so. However, we are in unprecedented times and rates rose toward the end of last year.
The Fed isn’t the only player in the financial markets and there are many others buying and selling securities. Remember that the Fed does not directly dictate that mortgage interest rates will be at a certain rate. Rates are determined by the supply and demand for mortgage-backed securities and can change rapidly from hour to hour.
However, the Fed is the major player in the market at this time and they do set the lead. Despite volatility throughout 2013, the Fed still kept rates historically low. The big unknown is how things will play out in 2014 as the Fed reduces their bond purchases. Without question, now is a great time to take advantage of mortgage interest rates at these still favorable levels. 30 year fixed-rates end the year at 4.625% Conforming and 4.375% FHA/VA.
8. This Week: Chicago PMI Manufacturing and Consumer Confidence are due out today with ISM Manufacturing and Construction Spending due out Thursday. The mortgage markets will close early on Tuesday and will be closed on Wednesday in Observance of the New Years holiday. The Employment Report is typically due out the first Friday of the month but will not be released until January 10, leaving a light week for economic data to begin the new year.
Thanks to James Williamson, Robbie Crozier and Susan Sharp at Shelter Mortgage for the above Mortgage news update. Contact them to get your home purchase loan or refinance started – tell them Sally sent you:
Call them to get started on your home loan:
James Williamson 404-483-5512 James.Williamson@sheltermortgage.com
Robbie Crozier 770-337-9833 firstname.lastname@example.org
Susan Sharp 770-724-8121 email@example.com
Looking for a good real estate agent to help you buy or sell a home in Atlanta GA – call Sally English direct at 404-229-2995 or email firstname.lastname@example.org