Thursday, March 18, 2010

Federal Reserve Vows to Keep Interest Rates Low

by Tom Petruno

RISMEDIA, March 18, 2010—(MCT)—Steady as it goes, Federal Reserve policymakers recently declared in their post-meeting statement. They left their benchmark short-term interest rate unchanged in the range of zero to 0.25% and once again pledged to keep it low for an “extended period”—retaining the phrase they’ve used for the past year.

The central bank continued to sound relatively upbeat about the economy, saying the data it looks at suggest that “economic activity has continued to strengthen and that the labor market is stabilizing.”

The Federal Reserve also said it would end, on schedule, its program of buying mortgage-backed bonds to help keep home loan rates low. That program will conclude at the end of this month when the Federal Reserve’s mortgage bond holdings reach the $1.25 trillion limit it set last year.
Even though the market obviously knows that the end of Federal Reserve bond purchases is near, average 30-year mortgage rates have remained around 5% for the last nine weeks, according to the weekly Freddie Mac survey.

As for the Federal Reserve’s benchmark short-term rate, just how long will that “extended period” of near-zero rates last? Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi, says some Federal Reserve policymakers have suggested that the phrase equates to three to four Fed meetings, which take place about every six weeks. If that’s true, “This means the Fed consensus thinks they will not need to move interest rates until the September 21 meeting,” Rupkey said.

For a second straight meeting, one Fed official dissented in the statement. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, objected to the pledge on low rates. Hoenig “believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability,” the Federal Reserve said.

In other words, he’s worried about inflation. But he has been unable to persuade any of the other nine members of the Federal Reserve’s interest-rate committee to come over to his side.

(c) 2010, Los Angeles Times.
Distributed by McClatchy-Tribune Information Services.
Posted on

Friday, March 12, 2010

Mortgage Rates Remain Below 5%

March 11, 2010
By Alan Zibel
WASHINGTON—Mortgage rates held below the 5 percent threshold for the second straight week, a report said Thursday, weeks before a government program that has been keeping rates low is scheduled to expire.

The average rate on a 30-year fixed rate mortgage was 4.95 percent this week, down from 4.97 percent a week earlier, mortgage finance company Freddie Mac said.
Rates dropped to a record low of 4.71 percent in December and have hovered around 5 percent since, kept down by a Federal Reserve campaign to stabilize the housing market by lowering mortgage rates.

The central bank’s $1.25 trillion program to buy up mortgage securities issued by Freddie Mac and sibling companiy Fannie Mae is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens.

Some analysts argue that rates could rise once the Fed’s program ends, hurting both the recovery in housing and the overall economy. But government officials are optimistic that the Fed will be able to end its program without a major disruption.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

This week, the average rate on a 15-year fixed-rate mortgage was 4.32 percent, down from 4.33 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.05 percent, down from 4.11 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.22 percent from 4.27 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 30-year and 15-year loans and 0.6 of a point for five-year and one-year loans.

A service of YellowBrix, Inc. Posted on (a website by the National Assoc. of Realtors)

Friday, March 5, 2010

February Sales Leader

Sellstate Premier Realty is pleased to announce that Leslie Osborne was tops in sales, listings and production for February.

Contact her at 828-254-4440 or at

Want to know more about Asheville Real Estate? Call Sellstate Premier Realty!

Tuesday, March 2, 2010

Asheville Citizen-Times Reports that County Housing Market is Upbeat

ASHEVILLE, Feb. 28, 2010 Jenny Street put her two-bedroom, one-bath home in West Asheville on the market with the usual worry — that it would linger there for months.
Ten days later, she had it under contract for about $120,000, a testament to a housing market in Buncombe County that is again showing signs of life.
“That's pretty affordable for people who are starting out versus some of the really fancy homes out there,” she said. “You can ask for more, but it's going to be on the market a lot longer.”
Sales of less-expensive homes like Street's, put under contract last week, have been the driving force behind a turnaround that started in the fall, a Citizen-Times analysis of Buncombe County government tax data indicates. More