The Fed was widely expected to announce a further
Investors and the real estate world were on high alert for clues of when the Fed would begin to lift interest rates: The U.S. central bank has vowed to keep rates low until the labor market is deemed "healthy" and inflation stabilizes at 2 percent. Yellen, in a live press conference carried online on Marketwatch.com, cut to the chase, making these main points.
--Inflation looks to be moving gradually to the 2 percent target.
--Bond-buying would be cut by
--The majority of Fed officials expect the first interest rate hike in 2015.
With home buying falling in
Home sale prices have been rising dramatically for more than a year, but they are coming off some of the lowest points ever. Sales, meanwhile, have lagged. That's not a good thing in the summer selling season. Any variation in lending rates can -- and has -- upset the proverbial apple cart.
"Although the average rate for the week was up only a few basis points, the increase was matched by a large drop in refinance volume; and purchase application volume also declined,'' MBA chief economist
"While home price inceases have tempered over the past few months, prices are still nearly 12 percent higher than a year ago, which is presenting affordability challenges to home buyers,'' said CAR chief economist
Tempered mortgage rates and home price increases would help spark the market in the upcoming months, she said.
Yellen on Wednesday hinted of action to strengthen financial regulation in a way that makes lending more robust and reduces systemic risk. "My own assessment is credit is broadly available in the economy," Yellen said, but banks are reluctant to lend to borrower with lower FICO scores. "Consistently, there are concerns about the risk. It is difficult for anyone who doesn't have pristine credit to get a mortgage.
"While I agree with the assessment there are practices with mortgage lending that need to be changed, it is important to work to clarify the rules around mortgage lending to crate an environment of greater certainty to enable mortgage lenders to extend more credit" to would-be borrowers.
Even before Yellen took her last question from the press, the needles on the Dow and the S&P stock market charts, pointed up.
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