Never mind that the Federal Reserve just scaled back its bond buying program this week because weaker housing data had a bigger impact on keeping mortgage rates from moving higher.
Business owners who said their credit needs are satisfied amounted to 32 percent of respondents, matching recent highs in November 2013 and September 2012.
The volume of mortgage refinancing applications dropped last week to its lowest level since November 2008, a deeper drop than in previous weeks attributed mostly to the Federal Reserve’s move to start tapering its massive bond purchases in January.
The Fed assured financial markets it would keep its short-term interest rate at near zero, where it has been since December 2008. It will stay there until “well past the time” that the unemployment rate drops below 6.5 percent.
Ground-breaking on U.S. homes soared to their highest level in nearly six years in November, yet another indication that the Federal Reserve will start the anticipated tapering of its bond purchases as the housing recovery intensifies.
Two big events are set to make buying a home tougher: (1) The Federal Reserve’s commencement of tapering its mortgage securities purchases and (2) New lending rules having to do with the “qualified mortgage” definition that will push higher the debt-to-income ratio requirements.
Average fixed mortgage rates changed little this week, with the 30-year fixed nudging down to 4.42 percent from 4.46 percent, but economic data indicates that this lull could be temporary if the Federal Reserve initiates tapering in the new year.
Average fixed mortgage rates slipped this week after data was released showing weaker manufacturing growth and declines in overall inflation rates.
A low short-term rate for banks helps keep a lid on big interest-rate surges on financial products vital to an economic recovery, including mortgages and auto loans.
The figures reflect uncertainty and anxiety over when the U.S. Federal Reserve will begin to slow its stimulus program of buying $85 billion per month in Treasuries and mortgage-backed securities.