How is the Mortgage Market looking in Kansas City? Mike Medsker gives us a weekly update . . .

 Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months...As far as the Fed is concerned, rate hikes are off the table through the first half of 2013. Economists are taking this as a given for now. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%–0.25%


TOUGH DAY AT THE OFFICE...Investors had a hard time making money last week as Wall Street was haunted by two specters--European debt and fears of a U.S. recession. French and German leaders met, but came up with no definitive solution to European banking problems, while Eurozone GDP was up just 0.2% in Q2. Investors worried about these conditions infecting our shores and sold off stocks, sending market indexes down for the fourth straight week. Pundits opined we may dip back into recession.  
Stock market volatility might make people hold back spending, which could cause a recession. But the economic data shows clear evidence we're growing, albeit slowly. Industrial production was up better than expected in July, while capacity utilization climbed to 77.5%. Weekly chain store sales have been up 3.5%-4.5%.Rail car traffic is up year-over-year. Steel Production was up for the week. Core CPI consumer inflation is up only 1.8% year-over-year. Corporations are financially in very good shape. None of this shows the economy falling off a cliff.

For the week, the Dow ended down 4.0%, to 10818; the S&P 500 was down 4.7%, to1124; and the Nasdaq was down 6.6%, to 2342.

Investors' flight to safety was more like a stampede into the bond market, pushing prices up. The FNMA 3.5% bond we're now tracking closed Friday at $101.14, up .09 for the week. Freddie Mac's survey showed national average rates on both fixed and adjustable rate mortgages hitting new record lows. 


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Please note: We all know mortgage rates are extremely low and refinance activity has increased; however, our primary focus is, and always will be, on providing professional, caring service to our partners. Thank you for trusting us to get the job done for you and your clients.

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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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