Easier to get a mortgage, US economy, Fed Funds Rate
September 18, 2015
Friday – September 18
Fannie Mae released its third quarter 2015 Mortgage Lender Sentiment Survey revealing that lenders say it’s now easier to obtain a mortgage as credit standards are beginning to ease. A Fannie Mae spokesperson cited that lenders are growing more comfortable with certain guidelines along with becoming more acquainted with the new rules and regulations. Doug Duncan, senior vice president and chief economist at Fannie Mae says, “Overall, we expect that lenders’ tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion.”
Fannie Mae also released its September Economic and Housing Outlook this week reporting that continued positive consumer spending and other solid domestic fundamentals are expected to offset recent market volatility and support modest improvement in U.S. economic growth in the second half of the year. Consumer spending has picked up in July and August as job growth continues, while wage growth has begun to rise. Fannie Mae sees total mortgage originations to increase 25% for all of 2015, though it sees refinancing activity to decrease modestly.
The Federal Reserve left its benchmark short term Fed Funds Rate unchanged (0.00% – 0.25%) at its Federal Open Market Committee meeting yesterday on Capitol Hill in Washington D.C. The central bank raised concerns of slowing global growth along with low inflation levels. The Federal Funds Rate is the rate in which financial institutions lend balances to one another on an overnight basis. The rate has been stuck at zero to 0.25% since December 2008 and has not been raised since June of 2006. The Federal Reserve embarked on bolstering the economy, jobs market and housing sector, by lowering interest rates.
