December 28th, 2018 5:37 PM by Robin Bain
The Year Ahead
The future of the economy will continue to be debated. There is no certainty in predictions but the recent data, Fed statements, and Fed action clearly signal continued signs of improvement. The biggest concern recently has been the extreme stock volatility. Stocks took a beating in the months prior to the Christmas Holiday only to bounce back over 1000 points the day after. Continued volatility will do little to ease investor fears.
Recent analysis of Fed statements and projections predicts fewer rate hikes in 2019 but doesn’t remove them completely. Many analysts calculate there will only 2 hikes in 2019 as opposed to predictions a few months ago of 3 or more. The effect on the housing sector, which remains a vital part of the economy, remains uncertain. However, the last thing the housing market needs is higher rates.
What we can be certain of is the likeliness that mortgage interest rates will become volatile as we get closer to the next Fed rate hike. Historically, mortgage interest rates seem to improve slowly. In contrast, when rates increase, they often do so quickly and furiously. One negative day often erases a week of positive improvements.
The Fed isn’t the only player in the financial markets and there are many others buying and selling securities. Remember that the Fed does not directly dictate that mortgage interest rates will be at a certain rate. Rates are determined by the supply and demand for mortgage-backed securities and can change rapidly hour to hour. Now is a great time to take advantage of mortgage interest rates at these still favorable levels and avoid exposure to future market volatility.
2018 Has been a great year with new products and increased loan limits! This has allowed us to help more clients with these changes. Also with Speed to Respond as one of our core values we ensure clients and agents are informed in a timely manner and transactions close on time. We are looking forward to a successful 2019!
Here's Wishing you A Very Happy New Year!
Dana Bain & Robin Dunbar Bain