When the FED speaks the markets react… and today they did not react positively for the consumers that are still looking to buy Real Estate in the California Bay Area…
In an already expensive market when rates rise 1% it dissolves a borrowers ability purchase by $100,000. Two things are likely to happen… Prices will be depressed and consumers will be able to afford less Mortgage Financing.
We are yet to see if this is a growing trend or if it is simply a one day ordeal that will fizzle out in the weeks to come.
So far as of today… Just about every bank that we work with has repriced their rates intraday much worse than when it came out this morning.
ACCORDING TO USA TODAY…
At its two-day meeting that ends Wednesday, the Fed is expected to further reduce its purchases of Treasury bonds and mortgage-backed securities, to $25 billion a month from $35 billion.
Citing a strengthening labor market, Fed Chair Janet Yellen has said the program, which is intended to hold down long-term interest rates and spur the economy, will likely end in October. READ MORE…
CHART: INTEREST RATES SPIKE ON JANET YELLEN’S COMMENTS
Jason’s Take on the Events today…
AS OF NOW IT IS IMPOSSIBLE TO TELL IF THIS WILL BE A TREND…
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WATCH THIS VIDEO TRAINING HOW YOU CAN PREDICT RATES
If you want to… Just fast forward the video to 7 minutes 20 seconds and I’ll show you something REALLY cool.
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