While many signs point to a U.S. economy accelerating on the road to recovery, global markets continue to put potholes in front of the Fed.
As the Federal Reserve gears up for its next Federal Open Market Committee (FOMC) meeting April 26 and 27, the likelihood of an increase to the Fed's benchmark Fed Funds Rate has been detoured.
Recently released FOMC March meeting minutes noted an increase to the Fed Funds Rate would "signal a sense of urgency" that is not "appropriate" at this time. The Fed gave a shout out to a range of labor market indicators, including strong employment growth and rising labor force participation. Gross Domestic Product also is projected to expand thanks to increases in household spending.
But many FOMC members see the strength in household spending offset by weakness in exports associated with lackluster foreign growth and the stronger U.S. dollar. Minutes stated "a sharp, though temporary, deterioration in global financial conditions earlier this year had not been fully resolved." Global conditions have led investors to consider the safety of the Bond markets, including Mortgage Bonds. Since home loan rates are tied to Mortgage Bonds, this uncertainty overseas is one reason home loan rates have remained attractive so far this year.
In housing news, home prices posted a 6.8 percent annual gain from February 2015 to February 2016, according to CoreLogic, a leading provider of housing analytics. Month-over-month prices also were up 1.1 percent from January to February.
At this time, home loan rates are still hovering in historically-low territory.
If you or someone you know has any questions about buying or selling a home, please don't hesitate to email or call me.
Posted on April 11, 2016 at 7:13 pm Randy Jeremiah