What Changes Will Be Enacted?
We now have a new President to go along with a new Congress. During the past year or so, we have endured what can only be described as an excruciatingly long election season mired in controversy and then even more controversy leading up to this time. With all this has come an endless amount of speculation as to the changes that will come about and what the effects will be on our economy.
Some of the questions center around trade agreements, regulations, foreign policy, health care and more. It has always been our policy to avoid political discussions and also not to get into speculation. This will not change. We don’t know what exactly will take place and certainly don’t know what effects these changes will have on the economy. Thus, we will discuss changes in policies which can affect the economy, real estate and jobs — but we have no better crystal ball than we have previously carried.
We do want to wish President Trump well, along with his administration and Congress. They certainly have a daunting task head of them, as does every new government. As an example, President Obama came in facing the deepest recession we had seen since the Great Depression — quite a challenge. Though there is a new direction, the economy and life will go on. For example, the Federal Reserve Board’s Open Market Committee meets next week for the first time since they raised rates in December. Most are not expecting another increase so quickly, and the change in administrations should not alter those expectations.
Note: Speaking of changes, we do know that upon the administration transition, the previously announced reduction in FHA Mortgage Insurance Premiums was suspended indefinitely by HUD. These changes were to take place January 27. HUD did not give a date by which they would revisit the policy.
The Weekly Market Update
Rates were lower for the third week in a row to open the year, however the numbers did not reflect the increase which occurred at the end of the survey period in reaction to comments made by the Chairperson of the Federal Reserve regarding full employment and inflation. For the week ending January 19, Freddie Mac announced that 30-year fixed rates fell to 4.09% from 4.12% the week before. The average for 15-year loans decreased to 3.34%, and the average for five-year adjustables moved down to 3.21%. A year ago, 30-year fixed rates were at 3.81%, 0.30% lower than today.
Attributed to Sean Becketti, Chief Economist, Freddie Mac. -- "After trending down for most of the week, the 10-year Treasury yield rose following the release of the CPI report. In contrast, the rate on 30-year fixed loans fell three basis points to 4.09 percent, the third straight week of declines."
Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.