Fed Rate Remains Unchanged

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Fed Rate Remains Unchanged



     Wrapping up this months Fed meeting, the central bank has decided to maintain the Fed funds rate at it's current target level of 0-.25%.  Mortgage rates are benefitting from the news, stocks are nearly unchanged, and now we've got another window of time before uncertainty about the direction of rates comes into the news again.Fed funds rate



     While improved mortgage rates would be a good thing, the Fed's actions today indicate that the economy is not as rosy as things may seem.  It also indicates that rates are no longer subject to our economic conditions - we are truly subject to the terms of a global economy.  Our inflation is healthy, the job market has improved (on paper, anyway), and many economic indicators are just fine.  Exports, though?  Not so much.  Economic conditions around the world played a very large role in today's decision by the Fed.



     I'm not sure how much of a break we'll get before the next round of Fed rate hike paranoia, but it could come down to the weather.  The past 2 brutal winters really put a dent in economic productivity, and if another one rolls around, the Fed likely won't want to combine a seasonal slowdown with a rate hike - that combination could easily sink us back into recession.  The next Fed meeting that is accompanied by a public conference is December, right before the winter gets tough.  If things drastically improve domestically and abroad, we could see a rate hike then, but if not, we may be in the clear until Spring time, at least.



     It'll be interesting to keep an eye on the world's major economies over the next few months - we've already seen what a large disruption thousands of miles away could mean for our own markets, as evidenced by the recent issues with China that caused our markets to flounder.  Many markets around the world are on very shaky ground, so whether or not rate hikes are on the way is up for debate, but 2 other things are not -- for one, the Fed WANTS to raise rates and feels they NEED to raise rates for a long term healthy economy.  And two, as things improve, mortgage rates will improve, too, but for investors, not consumers.  Higher mortgage rates are on the way - we saw a spike in rates just this week on the small risk of a Fed rate increase.  Mortgage rates improved immediately following today's decision.  When it comes to the Fed raising their target funds rate, and when it comes to mortgage rates, it's not a matter of if, but when, they'll be heading up.  



     The best time to buy a home was a couple of years ago when values and rates were at their best.  It's still an amazing time to buy with rates near the bottom and home values in many markets still modest.  In the future, as values and rates both increase, there will be a lot of people talking about "couldv'e, should've, and would've" when it comes to buying real estate.


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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Funny how it's been since 20 years ago, but things evolve that way I suppose.

Sep 17, 2015 04:55 PM #12
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Hopefully a lot of those "could've, should've, would've"s will become "dids."

Sep 17, 2015 09:10 PM #13
Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Good perspective here.  I think you're right that we will hear a lot of "shoulda woulda coulda."  We'll see what Oct and Dec brings.

Sep 17, 2015 09:12 PM #14
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

John, Thanks for the interesting info about the Fed and interest rates.

Sep 17, 2015 11:29 PM #15
Shirley Coomer
Keller Williams Realty Sonoran Living - Phoenix, AZ
Realtor, Keller Williams Realty, Phoenix Az

Great to know rates will still stay low.  Those of us old enough to remember rates at 10% to 18% still shake our heads at today's amazing rates!

Sep 17, 2015 11:54 PM #16
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

If we take a second look, the economics are not solid enough to support healthy rate raising. After all this time too...There are changes a coming ....

Sep 18, 2015 12:28 AM #17
Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

There was no doubt in my mind they were going to keep rates the same. Nothing in this economy tells me we're on firm ground. 

Sep 18, 2015 12:41 AM #18
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

John, Well, there you have it.  All that talk was about nothing.  They need to shush up or raise the rates. The industry does not need to hear all the hype about rates increases. 

Sep 18, 2015 01:45 AM #19
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

I think we can sum it up pretty easily, John Meussner ... who knows??  We can project and have an educated guess, but as of late ... even that has been hard to do.  So many things can interfere and change ...


Sep 18, 2015 01:59 AM #20
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

John, nice write-up. The Fed move is not surprising, although I wish they had given more of a positive nod to the improving economy, rather than focusing on some of the negatives. It certainly was not a unanimous vote.

Sep 18, 2015 02:44 AM #21
Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

John, I have been blogging for two years that is is no longer a local economy but a global economy. thanks for a fine post about the Fed.

Sep 18, 2015 03:27 AM #22
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi John - the coulda - shoulda - woulda approach is one we often hear in real estate.   If the time is right for you, if you are able and if you want to --- make this the time to enter or move up in the real estate world.  Nice perspective of yesterday's news.  

Sep 18, 2015 03:37 AM #23
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Glad to see the rates are not going up.  But it also makes me concerned that once they do go up, the economy is going to get shaken fairly hard. 

Sep 18, 2015 04:35 AM #24
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Thanks Jon. I don't think they wanted to spook the market.

Sep 18, 2015 04:44 AM #25
Andrew Mooers | 207.532.6573
Northern Maine Real Estate-Aroostook County Broker

Glad so many of our property listing sales in Maine are not tied to a bank loan and can be cash purchases. Or with land owner financing seller mortgage held custom made arrangments. Great news though John Meussner !

Sep 18, 2015 04:45 AM #26
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Thanks for the update, and guess I'm not too surprised rates didn't go up, although I thought they might. The Fed has a history of sending out mixed messages.

Sep 18, 2015 04:52 AM #27
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

John Meussner - thank you for your perspective.

Les predicted that Janet Yellen wouldn't raise rates. Guess, I should have listened to him. What happened yesterday  is a sure indication that our economy is still not as strong as it needs to be at. Besides that, our world economy sure is in a turmoil to say the least. 

Sep 18, 2015 06:14 AM #28
Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

You're right, John, that some people missed the boat a couple of years ago. But even with increasing home prices at current rates, people should still be locking them in and sooner rather than later.

Sep 18, 2015 07:32 AM #29
Jim Harper
Atlanta Communities Real Estate - Marietta, GA

I think I'm with George on this one. Artificial devices on the part of our government agencies and other entities only work for so long. It's good for the big corporations, but what about the "middle class?" Raise em.

Sep 19, 2015 01:52 AM #30
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

Great post!  My buyer's mantra is "could've, should've, would've" over the price increase this year.  I suppose that if they continue to sit on the fence they may be singing the same tune next year as well.  It's not easy being the voice of reason and most times they think that you are telling tall tales to encourage them to make a decision.  I will keep presenting the facts, the data and the statistics and hopefully a few will jump off of the fence.


Sep 20, 2015 08:08 AM #31
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