Today the Commerce Department released the fourth quarter GDP figure and it came in at 2.8%, below expectations of 3.2%. This means the overall US GDP for 2011 was 1.57%. Nothing to get excited about but balancing the GDP report is news that consumer confidence came in at its highest reading since February 2011. All in all the market is flat but still abuzz from the Fed’s announcement on Wednesday (more below)…
CURRENT INTEREST RATES | JANUARY 27, 2012
($200,000 – $417,000) 0 POINTS
• 30 Year Fixed: 3.875% (3.95% APR)
• 5/1 ARM: 2.750% (2.82% APR)
($625,501 – $2,000,000) 0 POINTS
• 30 Year Fixed: 4.750% (4.81% APR)
• 5/1 ARM: 3.250% (3.30% APR)
|CONFORMING (HIGH-BALANCE) RATES
($417,001 – $625,500 cap by county) 0 POINTS
• 30 Year Fixed: 4.000% (4.06% APR)
• 5/1 ARM: 3.125% (3.19% APR)
Rates are DOWN compared to last week.
Rates are DOWN compared to last month.
Rates are DOWN compared to one year ago
Historic Fed Statement Features a Commitment to Low Fed Funds through 2014 & Possible QE3!
On Wednesday the Federal Reserve Open Market Committee met for the first time this year and later issued a statement. Most of it was standard boilerplate “Fed-Speak” as well as observations about stable long-term inflation expectations, a tepid economic recovery, and a fragile job market. However, there was one big surprise. The Policy Statement said there will be “exceptionally low levels for the Federal Funds Rate at least through late 2014.” This is unprecedented and represents a huge change from the previous public statement of “low rates until mid-2013.”
The Fed later said the target rate for inflation was 2% as measured by the Core Personal Consumption Expenditure Index (PCE). The new PCE will be reported this Monday but the last reading was 1.7%. And if this holds, it means we are currently below the Fed’s target growth rate. So what can the Fed do to goose output? Well, short of receiving a deluge of greatly improved economic data from above, Traders believe this statement means the Fed is laying the groundwork for QE3. QE or “Quantitative Easing” is when the Fed buys financial assets to inject a pre-determined quantity of money into the economy. This would be the third round it has done so.
In anticipation of a possible QE3, interest rates have moved lower but understand this window of opportunity may be short-lived. History has shown Bonds move higher in anticipation of QE, but then sell-off once the Fed makes the official announcement… Think about the old investing adage, “Buy on the rumor and sell on the news”.
If you are thinking of refinancing or buying a new home you should contact me as soon as possible so we can get your loan in motion and be in a position to lock when rates are at their optimal level.
This article was reprinted courtesy of Gina Kemsley – Copyright © 2011 Gina Kemsley, Terra Mortgage Banking, All rights reserved.
Gina Kemsley – Senior Vice President - Loan Consultant, Terra Mortgage Banking
Office: (415) 464-3144 – Cell: (415) 828-0218 – Email: email@example.com – Website: www.terramortgagebanking.com/loan-officers/gina-kemsley
About the author: The above Real Estate information on Marin County Real Estate was provided by Sylvie Zolezzi. I can be reached via email at Sylvie@YourPieceOfMarin.com or by phone/text at 415.505.4789. I specialize in residential real estate in beautiful Marin County, just north of the Golden Gate Bridge.
My goal is to provide you with the best home buying or selling experience possible by combining my business and financial experience with meticulous attention to detail and a warm, personable and caring approach to meeting your needs. I have an excellent track record as a successful, results-oriented negotiator and effective communicator. My analytical skills and understanding of current market conditions, along with my ability to utilize a broad range of cutting edge technological and marketing resources, make me an invaluable real estate resource.
I am a long term Marin County resident and home owner. I strongly believe our quality of life is extraordinary and practically unmatched. I love our community, quaint towns and vast open space and never tire of their breathtaking beauty. I know the neighborhoods, the schools, the amenities; I know where you want to live. I know and love Marin County!