Biggest One Week Increase Since December 8th
We have to go all the way back to December 29th before finding another week where the average overnight interest rate on a fixed 30 year conforming loan moved higher. As of this morning the BankRate quotation is 4.35% up 8 basis points over the past week which erases all of the decline we have enjoyed over the past 4 weeks.
The big news this week was Wednesday's release of minutes from the Fed's January meeting and the plan for additional reductions in their monthly debt purchase program. In Ben Bernanke's last meeting it was agreed purchases would be trimmed another 10 billion per month although the timing for this additional reduction was unclear. The news pushed stocks lower and interest rates higher.
The minutes specifically state they recognize home buying has slowed and one wonders how much the recent two month slide in rates has impacted the first increase locally in pending home sales in over 9 months. Interest rates have moved rather significantly since last April when the Fed initially hinted at the tapering which started on January 1st. For now we should keep a close eye on interest rates and further Fed actions as perhaps no single metric has as much impact on how the real estate market, both locally and nationally, performs moving forward. Always interesting, always fun.