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Economic Center Blog

What Does Faster Inflation And Rising Mortgage Rates Mean For Housing?

By Mark Fleming on March 9, 2018

As the March Federal Reserve (Fed) meeting approaches, overall positive economic conditions are troubling those who follow the Fed closely. Many might pose the question, why would positive economic conditions be troubling?

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

Where Is House-buying Power The Strongest?

By Mark Fleming on February 14, 2018

Whether you plan to buy a modest studio or a four-bedroom penthouse, how much you can afford to borrow primarily rests on two main factors: income and interest rates. Income growth seems to be increasing, thus increasing affordability. However, the near certainty of future rate hikes will likely be a drag on affordability.

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

Best Cities To Maximize Borrowing Power For First-Time Home Buyers

By Mark Fleming on December 11, 2017

It’s a near certainty that the Federal Open Market Committee (FOMC) will raise the short-term Federal Funds rate this week. The CME group estimates the probability of a 25 basis-point increase at 90.2 percent. Some may fret about how this will impact the housing market, but they are missing the point on mortgage rates and affordability for first-time home buyers.

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

Many Experts Miss The Point On Mortgage Rates And Affordability For First-Time Home Buyers

By Mark Fleming on November 6, 2017

Last week, the Federal Open Market Committee (FOMC) met for the second to last time this year. As most prognosticators expected, the FOMC decided to leave the short-term Federal Funds rate unchanged. While good news for those with credit card debt, car loans and adjustable rate mortgages, the impact of FOMC inaction, or action for that matter, is less clear for the mortgage market. Additionally, Jerome Powell was nominated to be the next Chairman of the Federal Reserve and he is widely believed to hold a similar stance on monetary policy as the current chair, Janet Yellen.

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

Will Quantitative Un-Easing Make Housing Unaffordable?

By Mark Fleming on September 20, 2017

This month, the Federal Open Market Committee (FOMC) will consider again whether to increase the benchmark Federal Funds Rate for a third time this year. As I stated when the FOMC was contemplating a rate increase earlier this year, increasing the short-term Federal Funds rate has little impact on longer term rates like the 30-year, fixed-rate mortgage. But, more importantly, the FOMC may start reducing its $4.5 trillion portfolio of bonds purchased during the global financial crisis through various rounds of quantitative easing (QE). Almost 40 percent of that portfolio is mortgage backed securities (MBS) that the Fed started buying in 2009. As explained by the FOMC in June, the “Quantitative Un-Easing” plan, could begin at any point this year with the reduction of $4 billion a month in MBS. The pace of MBS sales would increase by $4 billion each quarter up to a maximum of $20 billion per month.

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Topics: Housing, Interest Rates, Federal Reserve, insider

Here’s Why A Fed Rate Increase Does Not Matter To The Housing Market

By Mark Fleming on June 13, 2017

With the Federal Reserve Open Market Committee (FOMC) meeting to decide whether to increase the Federal Funds rate in just a few days, the potential for an increase in mortgage rates dominates the housing news and industry chatter. Yet, changes to the short-term rate matter little to the housing market.

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Topics: Interest Rates, Federal Reserve, insider

Real Estate Outlook Declines On Election Uncertainty And Heightened Expectations For Fed Rate Hikes

By FirstAm Editor on December 21, 2016

We invite you to browse the fourth quarter 2016 First American Real Estate Sentiment Index, which is based on a quarterly survey of independent title agents and other real estate professionals, providing a unique gauge on the real estate market using the crowd-sourced wisdom and expertise of real estate experts.

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Topics: Interest Rates, Real Estate Sentiment Index, Federal Reserve

What A Difference An Election Makes

By Mark Fleming on December 13, 2016

What a difference an election makes. Since the election, we have seen a pronounced increase in the popular 30 year-fixed mortgage rate. In the words of Federal Reserve Chairman Janet Yellen, financial markets expect that expansionary fiscal policy will accelerate U.S. economic growth and increase inflation. As a result, the 30-year fixed mortgage rate is now over 4 percent. In addition, the Federal Open Market Committee (FOMC) will likely announce this week a raise in the target range of the Federal Funds rate, from 25-to-50 basis points (bps) to 50-to-75 bps.

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Topics: Interest Rates, Existing Home Sales, Real House Price Index, Federal Reserve

Optimism For Growth In Real Estate Transactions Improves Substantially Over Last Quarter

By FirstAm Editor on June 21, 2016

We invite you to browse the second quarter 2016 First American Real Estate Sentiment Index, which measures title agent sentiment on a variety of key market metrics and industry issues. In 2016, the survey has also tracked title agent sentiment regarding the implementation of the Know-Before-You-Owe rule, also referred to as the TILA-RESPA Integrated Disclosure (TRID) rule. It’s based on a quarterly survey of independent title agents.

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Topics: Interest Rates, Real Estate Sentiment Index, Federal Reserve

Really, How Important Is That Rate Hike?

By Mark Fleming on June 13, 2016

With the upcoming Federal Open Market Committee (FOMC) meeting this week, many are wondering if an interest rate hike is in the works. According to the CME FedWatch Tool, the current market expectation of a 0.50 percent rate increase in June is extremely low – 4 percent. However, the likelihood jumps to 27 percent in July. But, whether the Fed raises rates in June, July or later this year, how much impact would it have on the current housing market?

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Topics: Interest Rates, Real House Price Index, Federal Reserve, income