Remember that the Fed had been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. Starting this month, the Fed will now purchase $40 billion in Treasuries and $35 billion in Mortgage Bonds (the type of Bonds on which home loan rates are based). The decision to further taper these purchases will be dependent on economic data.
Speaking of economic data, Consumer Confidence rose to 78.1 in December, rebounding from the lows hit in October and early November due to the government shutdown. In housing news, the S&P/Case Shiller Home Price 20-City Index rose by 13.6 percent year-over-year in October. This was just below expectations, but up from the 13.2 percent annual gain recorded in September. Pending Home Sales for November ticked up slightly, while New Home Sales fell slightly to an annual rate of 464,000 units. However, the number of New Home Sales for October was revised up to 474,000, which was the highest level since July 2008. Overall, the housing market continues to improve.
What does this mean for home loan rates? The Fed will be closely monitoring economic reports in the coming weeks and months as it decides when to further taper its Bond purchases. The timing of further tapering could have a big impact on Mortgage Bonds and home loan rates this year. This is a key story to watch in 2014.
The bottom line is that now remains a great time to consider purchasing a Lake of the Ozarks home or refinancing your home loan, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.
Wishing you a very happy New Year!
I would love the opportunity to help you manage your Lake of the Ozarks Mortgage Loan or refinance. Give me a call at (573) 746-7211 or send me an email at email@example.com with any questions you may have!!
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Sr. Residential Mortgage Lender
2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049