It will likely be March 2014 before the government decreases the limit on the size of loans that taxpayer-owned Fannie Mae and Freddie Mac can back, the firms’ regulator said Thursday.
The Federal Housing Finance Agency said any change would be phased in to avoid economic disruptions.
“We’re not looking to disrupt the market or create some sudden dislocation,” FHFA Acting Director Edward DeMarco told reporters. “Anything we would do would have a long lead time and be gradual and measured.”
After consecutive weeks of inching upward/remaining the same, mortgage rates dropped. Not just a little bit, either. In fact, rates dropped to their lowest point since June. According to Freddie Mac’s Primary Mortgage Market Survey:
30-year fixed-rate mortgage (FRM) averaged 4.13% with an average 0.8 point for the week ending October 24, 2013, down from last week when it averaged 4.28%. A year ago at this time, the 30-year FRM averaged 3.41%.
15-year FRM this week averaged 3.24% with an average 0.6 point, down from last week when it averaged 3.33%. A year ago at this time, the 15-year FRM averaged 2.72%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.00% this week with an average 0.4 point, down from last week when it averaged 3.07%. A year ago, the 5-year ARM averaged 2.75%.
1-year Treasury-indexed ARM averaged 2.60% this week with an average 0.5 point, down from last week when it averaged 2.63%. At this time last year, the 1-year ARM averaged 2.59%.
The S&P 500 ended Friday at another record high, boosted by gains in technology shares after strong results for Microsoft and Amazon.com. The market continued to rise following last week’s legislation to avoid a U.S. debt default and end the government shutdown. The Dow Jones Industrial Average ended the week up 61.07 points (0.39%). The NASDAQ also finished the week up 14.40 points (0.37%).
The Week Ahead
Fed policy makers meet Tuesday and Wednesday when they will consider when to start trimming $85 billion of bond purchases.
Tuesday, Oct. 29
- Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to consumers. Sales are by retail and food service stores. After a 0.4% gain in July, retail sales increased by another 0.2% in August.
- Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in the prices received by domestic producers of goods and services. In August, the PPI rose 0.3% after no change in July.
- Case-Shiller (9 a.m. ET) – The S&P/Case Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The index was up 0.6% in July, but down from 0.9% gains in the prior two months.
- Consumer Confidence (10 a.m. ET) – Consumer Confidence is based on consumers’ perceptions of current business and employment conditions, as well as their expectations regarding business conditions, employment and income. Confidence dropped 2.1 points in September.
Wednesday, Oct. 30
- Consumer Price Index (CPI) (8:30 a.m. ET) – The Consumer Price Index measures the change in the average price level of a fixed basket of goods and services purchased by consumers. The CPI posted a 0.1% rise in August, compared to July’s 0.2% rise.
- FOMC Rate Decision (2 p.m. ET) – The Federal Open Market Committee is the policy-making arm of the Federal Reserve. It determines short-term interest rates in the U.S. It is expected that rates will remain unchanged after the meeting.
Thursday, Oct. 31
- Oct. 31 Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. While initial jobless claims remain high, they are decreasing. Claims hit highs of 362,000 and 373,000 in the two weeks prior, which were inflated by the government shutdown.
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