RATES FALL SLIGHTLY ON FOMC ANNOUNCEMENT
December 19th, 2008 Categories: Buyer's Corner, First Time Buyers, Market Conditions, Relocating, Selling Thoughts, Trends
Mortgage interest rates fell slightly this past week as the Fed cut the discount rate by 75 basis points at the conclusion of its FOMC meeting on Tuesday. Additionally, the Federal Reserve stated that they would purchase large quantities of agency debt and mortgage backed securities to support the mortgage and housing markets. The yield on the 10 Year Treasury Note fell from 2.58% last Friday to 2.10%
currently but mortgages have not kept pace.
Economic data of note included sharp declines in November Housing Starts and Building Permits, which fell to their lowest levels on record. The November Consumer Price Index (CPI) fell 1.7%, the largest decline on record. Core CPI, excluding the food and energy components, was unchanged.
The Dow Jones Industrial Average is currently at 8,611, down slightly on the week. Crude oil futures are currently trading at $35.10 per barrel, down over $11 per barrel on the week. President Bush announced that GM and Chrysler will get $13.4 billion in government loans in exchange for restructuring their businesses.
Next week look toward Tuesdays final read on third quarter GDP, Wednesdays Durable Goods Orders and Personal Income and Outlays as potential market moving events.
