Fed Report: Real Estate Stabilizing in Key Cities

While real estate and other industries remained weak in all 12 of the Federal Reserve districts, there is reason for optimism in several areas, according to the Federal Reserve, which released its periodic “Beige Book” report of economic activity on Wednesday.

In Boston, Fed contacts reported “early signs of improvement” in the residential real estate sector, and the news was equally good in New York where the book said banks are reporting “the most widespread rise in demand for residential mortgages in more than seven years.”

In Richmond, Va., commercial real estate is reporting moderate increases in activity and residential lending is rising because of strong demand for refinancing, the report said. Demand for refinancing is “hard to keep up with,” one of the Fed’s contacts said.

Meanwhile, commercial real estate weakened in Kansas City while residential real estate is holding steady, the report concluded.

Source: The Wall Street Journal, Meena Thiruvengadam

The Fed: Coming to a Theater Near You

The Federal Reserve is taking over the big screen, showing ads at movie theaters that warn against foreclosure fraud.

The spots will run in 14 cities with high-foreclosure rates and an abundance of financial scam artists who often result.

The ads last 30 seconds and feature photos of individuals and families. They open with the question, “Are you facing foreclosure?” and close with the reassurance, “It shouldn’t hurt to get help!” Before the fade, there are foreclosure tips.

“Everyone goes to the movies at some point,” says Sandra Braunstein, director of the Fed’s Division of Consumer and Community Affairs “The more attention we can put on this, the more consumers can protect themselves from scam artists.”

Source: The Wall Street Journal, Sudeep Reddy (03/27/2009)

Fed Surprises with Deepest Cut since 1984

The Federal Reserve surprised everyone Tuesday with an emergency intersession rate cut of .75%, the deepest cut in the Fed Funds Rate since 1984. The Fed Governors are acting in direct response to recent reports that the country is on the brink of recession.If you have credit cards, auto loans, HELOCs, or an Adjustable Rate Mortgage, the Fed’s decision to cut this key interest rate is great news. For long-term mortgage rates however, this could signal the beginning of the end for the lowest 30-year home loan rate borrowers have experienced since 2005.

Let’s look at the impact of a few recent Fed Funds Rate cuts and the corresponding impact to home loan rates to see what this could mean for you:

Period Fed Funds Rate Cut Impact to Home Loan Rates
January to June 2001 Down 2.25% Rose 0.10%
October to December 2001 Down 0.75% Rose 0.45%
May to August 2003 Down 0.25% Rose 0.78%

Rates are predicted to be cut again when the Federal Reserve meets at the end of this month. Many believe Tuesday’s action was taken because of a dramatic downturn in the stock market, where the Dow dropped 464 points, the worst single day drop since September 11, 2001. Since the Fed’s announcement, the Dow has recovered much of those losses but volatility is likely to remain a consistent theme throughout the week.

If you are waiting for long-term mortgage rates to fall further from here, don’t count on it. Your best chance to lock in the lowest mortgage rates since 2005 is now. Getting your application in process will allow you to capture a rate near all time lows and, with many experts predicting home values could continue to decline, waiting could kill your chance to capture a great rate if your home doesn’t appraise.

This is an unprecedented market and things are moving fast. Regardless of your current mortgage, please give me a call so that we can review your current financial situation in light of these market movements.

Call today to discuss how I may assist you. Not calling today could cost you tens of thousands of dollars in the next few years. Don’t let this happen. I look forward to hearing from you.

  Vonda Henry
Loan Officer
Advertent Mortgage Company
Phone: (404)374-3557
Fax:(404)806-0073
vkhenry@bellsouth.net