housing market - feds leave rates unchanged this week

Please enjoy this quick update on what happened this week in the housing and financial markets.

	The Fed concluded the most recent FOMC meeting and announced there would be no policy rate increases. The next FOMC meeting is scheduled for March 14/15.
	Economic activity in manufacturing expanded in January, surpassing economists' expectations. Manufacturers grew at the fastest pace in more than 2 years.
	The Consumer Confidence Index dropped in January after reaching a 15-year high in December. Despite the slight drop, consumers remain confident overall.

	Construction spending was down slightly overall in December. However, spending on residential structures was up 0.5%.
	Despite an increase in mortgage rates, pending home sales rose 1.6% in December compared to November. Sales were up 0.3% year-over-year.
	Home prices continue to rise, up 5.6% in November according to Case-Shiller. Increases are supported by rising personal income & decreasing unemployment.

When an employment application asks who is to be notified in case of emergency, I always write, “A very good doctor."

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

Sincerely,

Christopher Gianino
Pinnacle Real Estate Advisor by Gershman Mortgage
Vice President
NMLS 252641
(314) 280-5662
cgianino@gershman.com
www.PinnacleRealEstateAdvisor.com

Lower FHA premiums to fuel home buying in 2015

Lower FHA premiums to fuel home buying in 2015: In a move designed to bring more first-time homebuyers into the housing market, the Federal Housing Administration (FHA), the government insurer of home loans, will lower its annual insurance premiums from 1.35 percent to 0.85 percent. Mortgage bankers praised the decision. "It couldn't come at a better time," said David Stevens, CEO of the Mortgage Bankers Association. "February is the beginning of the spring market. I think it will have a definitive impact particularly in the first-time homebuyer market." For the typical FHA applicant, the reduction in premiums means a savings of about $80 on their monthly payment, according to CoreLogic's chief economist, Sam Khater. The FHA had been the only low down payment product available, with a minimum 3.5 percent down, but recently Fannie Mae and Freddie Mac announced a new 3 percent down payment product that would require private mortgage insurance. The product would compete directly with the FHA and could have offered some borrowers a cheaper option if they had a good credit score. But many applicants that would qualify under FHA's credit and debt-to-income guidelines would not have been approved for the new Fannie and Freddie programs, so this move by FHA will add more purchasers into 2015. provided by: Dave Budzinski NMLS#: Phone: 314-862-0123 Email: everyonebigbend@mimutual.com