Manhattan rents drop for first time in 2 years
The Real Deal
April 7, 2016
“For the first time in two years, the median residential rental price has decreased in the borough, according to a new report by Douglas Elliman. The median rent in March dropped to $3,300, a 2.8 percent decrease from March 2015. Over the last few months, the rate of price growth slowed, preluding a rental flatline.”
U.S. Apartment Market Shows Signs of Losing Steam
The Wall Street Journal ($)
April 7, 2016
“The apartment-rental market cooled in the first quarter, according to reports from three research companies, suggesting a six-year boom that has pushed the cost of housing to unaffordable heights in many U.S. cities might be coming to an end.”
Rogue One: A Star Wars Story (2016) Teaser Trailer
Trailer Addict
April 07, 2016
“Rogue One is about a group of rebels who set out on a mission to steal the plans for the Death Star. This is only the first teaser, so don't expect too much to be revealed, but they do show quite a bit and it looks amazing.”
Experts warn affordable housing rules will hurt development
The New York Post
April 5, 2016
“The City Council and Mayor de Blasio can high-five all they want, but real estate experts believe the new Mandatory Inclusionary Housing (MIH) policies that require affordable units to be interspersed throughout buildings — while so far, not providing any real estate tax breaks in return for the lower rents — will put a damper on development.”
Will Rising U.S. Debt Levels Keep the Fed On Hold?
Charles Schwab
April 4, 2016
“The national debt factors into the Fed’s decisions only insofar as it affects the economy and inflation. Otherwise, fiscal policy is in the hands of Congress. So, what do the debt dynamics look like? The Congressional Budget Office (CBO) compiles a lot of useful data on this topic. It recently released its updated 10-year projections for the country’s financial outlook. The report is available online here, and we’ll take a closer look at some of the numbers below.”
Bryce Harper wore a 'Make Baseball Fun Again' hat after the Nationals' win
USA Today | For The Win
April 4, 2016
“Harper has been outspoken in his dissatisfaction with baseball’s unwritten rules. He wants players to express themselves and have fun on the field. He is in favor of the bat flip, and bat flips are awesome. Harper 2016.”
MAP: The Ramones' New York
DNAinfo
April 3, 2016
“The Queens Museum is about to unveil its tribute exhibit, "Hey! Ho! Let's Go: Ramones and the Birth of Punk" on April 10 — honoring the band's deep roots in the borough. But before Joey, Johnny, Dee Dee and Tommy Ramone — and later Marky, Richie, Elvis and CJ — took the world by storm, they got their start in Forest Hills. The original bandmates lived on Yellowstone Boulevard and wreaked havoc on Queens Boulevard, connecting at Forest Hills High School.”
Showing posts with label federal reserve. Show all posts
Showing posts with label federal reserve. Show all posts
Friday, April 8, 2016
Friday, June 19, 2015
How will an increase in the federal funds target rate affect mortgage rates?
The Federal Open Market Committee (FOMC) of the Federal Reserve announced in June that it will maintain the current 0.00% to 0.25% target range for the federal funds rate, the recommended rate at which banks lend to each other. The Federal Reserve can control the rate by buying or selling government bonds, in an effort to maximize employment and control inflation. The economy has been operating in a low interest rate environment since the recession and many fear that a rise in the federal funds rate will have a negative impact on mortgage rates.
Mortgage rates are market driven by lenders competing to attract investors, not just the federal funds target rate. Although they are affected indirectly because of the impact on borrowing costs, mortgage rates are largely affected by the direction of the economy and yields on competing financial products, such as treasuries and bonds. Mortgage rates don’t increase simply because the target rate increases, although some economists are worried a rate increase will have a direct impact on mortgage rates in the current economic environment.
The Federal Reserve has not officially announced a date to raise the target rate, although 15 of the 17 FOMC members surveyed stated that they believe the hikes will begin before the end of 2015. Some economists have predicted that the first rate increase will be announced at the fed’s September meeting. However, Chair Janet Yellen ensured this week that rate increases will be gradual and that policy will remain accommodative, indicating the target rate will likely end the year between 0.5% and 0.75%. The committee’s median target rate estimate for 2016 is 1.625% and 2.875% for 2017.
Given today’s low interest environment, even small increases could have a large impact. The federal funds rate has remained below 1% for nearly seven years, while the average rate for Freddie Mac 30-year mortgages has remained below 6% during that time. Prior to the most recent recession that started in late 2007, the effective federal funds rate held steady at 5.3%, while mortgage rates averaged just over 6%. In the early 1980s, mortgage rates peaked at over 18% and the fed rate climbed over 19%.
The FOMC’s economic projections also play an important role in the direction of mortgage rates, since a strong economy usually means higher rates, while a weaker economy leads to lower rates. The committee’s June projections estimate that the economy will grow at a 1.8% to 2.0% pace during 2015, which was revised down from the 2.3% to 2.7% projection published during March. Growth for 2016 is projected at 2.4% to 2.7%.
The federal funds target rate plays an indirect role in the direction of mortgage rates, with the marketplace and other key indicators of the economy playing larger roles. Given the Federal Reserve’s statements regarding accommodating policy and that the economy has still not recovered to full strength, any increase in mortgage rates driven by an increase in the federal funds target rate are expected be gradual.
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