Newsletter - January 2016
To say that the Federal Reserve raising the federal funds target rate was expected would be a bit of an understatement. We knew it was coming. It was a matter of when. Nonetheless, now that it has happened, it is an important indicator of how the FED is interpreting housing market data, and it will have repercussions throughout the industry, which we should all be attuned to and aware of.
In light of this, we are providing a roundup of what some heavy hitters in the finance and mortgage industries are saying about the hike and how it will impact other aspects of market.
“Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent.”
-Federal Reserve Open Market Committee Spokesman
“I applaud the Federal Reserve for making the long overdue decision to raise the federal funds rate … This decision represents a strong statement of faith that the long-term fun-damentals of the market point to a period of growth and sustainability.”
-Ed Delgado, President and CEO of Five Star Institute
“This is one small step on an overdue journey for the Fed.”
-Doug Duncan, Chief Economist at Fannie Mae
“Consumers that have been on the fence about moving forward will now be more likely to make a move … It’s imperative for people in the mortgage industry to educate them-selves on the benefits of ARMs and to align themselves with real estate agents.”
-Mat Ishbia, President and CEO of United Wholesale Mortgage
“We don’t expect mortgage rates to move up in-step with the funds rate, though home-ownership will be further out of reach for many renters.”
-Steve Hovland, Director of Research at HomeUnion
“The real calculus is a function of what the markets believe the next move is. Will we see one or two moves this year? Ultimately, if the near term target for interest rates is 2 per-cent, the path will be bumpy in the housing markets but affordable.”
-Tom Booker, Director of The Collingwood Group
Clearly, there are a range of opinions on the committee’s decision, but a common thread seems to be: Don’t expect the fallout to be anything crazy. Most thought leaders seem content with the decision and hopeful on what it means for the market.
But regardless of what comes from the hike (or anything else that comes down the pike), you need proper and complete documentation for your entire portfolio to avoid potential disaster, and that’s where Blue Streak Docs can help. If you haven’t worked with us yet,
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