Tag Archives: Federal Reserve

The Bureau of Labor Statistics (BLS) released Friday its Employment Situation Report, revealing job growth well below consensus forecasts. According to the government report, the U.S. economy added 74,000 jobs last month. Meanwhile, the unemployment rate dropped 0.3 percentage points to 6.7 percent, reflecting a precipitous drop in the labor force. BLS' report shows the labor force participation rate falling 0.2 percentage points to 62.8 percent.

The United States Senate voted Monday to confirm Janet Yellen as chair of the Federal Reserve following Ben Bernanke's departure at the end of January. She will be the first woman to take the job in the Fed's history.

With investment activity diminishing and mortgage-dependent buyers returning, economists at Capital Economics say the housing market can look forward to a more moderate pace of price increases.

In a commentary shared with theMReport.com, Peter Muoio, chief economist for Auction.com Research, revealed the company's predictions for 2014. Chief among his predictions: Housing will get its second wind, the Federal Reserve's stimulus taper will take longer than most people expect, and Congress will (hopefully) get out of the way of the housing recovery--though even Muoio acknowledges the latter prediction might just be hopeful thinking on his part.

Global economic growth will increase from 2.5 percent this year to 3.3 percent in the new year, with the U.S. economy growing 2.6 percent, up from 1.7 percent this year, according to IHS Chief Economist Nariman Behravesh and IHS Chief U.S. Economist Doug Handler. Europe's recovery "will proceed, but at a very sluggish pace," with growth reaching 0.8 percent, up from -0.4 percent this year. Meanwhile, the dollar will gain strength as the Fed tapers its stimulus while other central banks continue theirs, according to IHS.

For all the Sturm und Drang surrounding discussions of the Federal Reserve slowing down its monthly asset purchases, mortgage rate movements were somewhat subdued this week leading up to Wednesday's announcement of cuts to the stimulus program. Freddie Mac reported small rate jumps for the week ending December 19, with the 30-year fixed-rate mortgage (FRM) average inching up to 4.47 percent (0.7 point) from 4.42 percent previously. Last year, the 30-year FRM averaged 3.37 percent.

The Mortgage Bankers Association (MBA) reported a 5.5 percent decline (seasonally adjusted) in loan applications for the week ending December 13. On an unadjusted basis, MBA's Market Composite Index was down 6 percent. According to Mike Fratantoni, MBA's VP of research and economics, the latest index is the lowest it's been in more than 12 years. "Both purchase and refinance applications fell as interest rates increased going into today's Federal Open Market Committee meeting," Fratantoni explained.

Federal agencies assured institutions that they will not base their judgments of a loan's safety and soundness on its status as a QM or non-QM loan.

Despite a reported rise in homebuyer confidence in the third quarter--the first this year--unrealistic mortgage rate expectations could lead the housing recovery astray.

Modest to moderate economic growth continues to be the theme at the Federal Reserve, which released on Wednesday its Beige Book tracking expansion across its 12 districts from October through mid-November. The Fed reported improvements in residential real estate activity in Boston, Philadelphia, Chicago, St. Louis, Minneapolis, and San Francisco, with slower single-family home sales softening real estate in most of the remaining districts.