Shelter Six:  Federal Reserve Pledges to Keep Rates Low

There were few surprises from last week’s Federal Reserve meeting as the Fed reiterated it does not plan to raise short-term rates over the next couple of years.

The steady recovery in consumer spending continues with August Retail Sales figures rising a solid .6% from July and now up 3% over last year.

The National Association of Home Builders (NAHB) reported that builder confidence in the new-home market hit an all-time high for the second month in a row in September.

August Housing Starts declined 5% from July, but the weakness was entirely due to a 23% decline in multi-family units, which are very volatile from month to month.

Single-family Housing Starts actually increased 4% from July, and single-family Building Permits, a leading indicator of future construction, rose 6% from July.

Rising cost of lumber and delays for building materials, however, threaten to slow down new construction (lumber prices are up more than 170% since mid-April, adding more than $16K to typical new-home price).

Rate Update

Last week’s economic data and Federal Reserve meeting had little impact on mortgage markets, and rates again held steady around 3% levels.

This Week

It will be a very light week for economic data with Existing Home Sales due out on Tuesday, New Home Sales on Thursday, and Durable Orders on Friday.

September 21, 2020 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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