Atlanta Mortgage News September 25 2013

Many thanks to James Williamson and Robbie Crozier at Shelter Mortgage for the Atlanta Mortgage news update for September 25 2013.

Atlanta Mortgage News:

1. The most highly anticipated Federal Reserve meeting in years captured all the attention last week. The Fed’s lack of action caught nearly every investor by surprise as the Fed decided not to “taper” its bond purchase program. Mortgage rates dropped swiftly following the news and ended the week lower. 
2. Investors were expecting at least a small cut in the quantity of monthly Fed bond purchases, yet the Fed made no such change. Fed Chief Bernanke stated after the meeting that the economic data “does not yet provide sufficient confirmation” to justify reducing bond purchases. The economy is really going to have to turn the corner before the Fed takes such action.
3. The housing sector has been a major source of strength for the economy this year but the big question is how will the recent rise in rates impact future activity? If the August figures are any indication, the answer will be favorable. August Existing Home Sales showed a modest pace of improvement increasing 2% to the highest level since February 2007, exceeding even the peak seen in November 2009 when the homebuyer tax credit was set to expire.
4. Existing Sales were even stronger and 13% higher than one year ago. The graph below paints a favorable picture and a healthy trend. 
5. The biggest problem right now with sales is probably inventory not rates. A little good news to report on this front as the total inventory of existing homes available for sale rose slightly to a 4.9-month supply. 
6. On Jan 10, 2014, the Dodd-Frank Wall Street Reform & Consumer Protection Act will go into effect ending such features as the interest-only loan and amortization terms over 30 years. Another casualty will be the Conventional 3% down option. Most buyers in this down payment range go with FHA, so this is not a huge loss. However, there is a segment of 3% down buyers with good credit that will really miss this program. The biggest change of all that you might hear about though is a 43% cap being placed on the “debt-to-income” ratio. Fortunately, this rule will NOT apply at this time to any Fannie Mae, Freddie Mac, FHA, or VA loan that gets an automated approval.

Rate Update: The Fed’s lack of action last week was good for mortgage rates but investors probably lost some faith in their ability to predict what the Fed will do in the future. This will probably lead to higher levels of volatility in the future. The benchmark Conforming 30 year fixed-rate is now back down to 4.375%.

This Week : Durable Orders and New Home Sales will be released today with Pending Home Sales and the final revisions to second quarter GDP out on Thursday. Core PCE inflation, the Fed’s preferred inflation indicator, will be released on Friday as will Personal Income. Consumer Confidence and Consumer Sentiment round out a busy week. 

Contact INFO for James and Robbie on Englishteam.com

Call or text Sally English 404-229-2995 if you would like advice on buying or selling an Atlanta GA home.