On Monday, we published our annual set of predictions for real estate and mortgage markets for the upcoming new year. Number nine on our list of “10 thoughts for 2013” was “Fed policy: Operation Twist ends, something new starts.”

That prediction came early. At the conclusion of the last Federal Open Market Committee (FOMC) meeting in 2012, the Fed did in fact announce that Operation Twist will sunset at the end of the month as originally planned, and the policy-setting group also announced a new effort to keep mortgage rates low and improve the economy as a whole.

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This morning’s job numbers proved to be another disappointing month for employment in the U.S. The Bureau of Labor Statistics reported this morning that only 115,000 new jobs were added last month. The unemployment rate eased to 8.1 percent in April from 8.2 percent in March. The decline in the unemployment rate was caused by more job seekers giving up their search for new work.

The good news is that March’s figure was revised upward, from 120,000 to 154,000. From December to February, the monthly job’s numbers have averaged 252,000 new jobs each month. Economists believe that the unseasonably warm winter stole some hiring from March and April. Read the rest of this entry »

Below is an excerpt from HSH.com’s latest Market Trends newsletter, written by Keith Gumbinger, vice president of HSH.com. Sign up and receive the newsletter in your inbox Friday evening.

By a whisker, mortgage rates eased to new record-low levels last week, as neither the economy nor the Federal Reserve gave any indication that there is a reason for them to rise at the moment.

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The Federal Reserve kicked off its new strategy of clearer communications at the close of January’s Open Market Committee meeting last Wednesday afternoon. With just a few words, plus some charts (page 3), the Fed now expects to keep interest rates “extraordinarily low” for a period up to 18 months longer than the mid-2013 estimate previously in place. Also for the first time, the Fed officially revealed more explicitly that it will use an inflation target to help control monetary policy.

The Fed’s influence on mortgage rates

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There were plenty of economic twists and turns last week which allowed mortgage rates to find some additional room to fall.

Fed and economy send rates downward

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First, two questions to consider

Question1: What has been one of the biggest stumbling blocks of the HARP program?

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As expected, the Federal Reserve announced this afternoon that they are moving forward with their latest economic policy dubbed “Operation Twist,” which may lead to even lower mortgage rates.

What is Operation Twist?

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Many market observers are expecting the Federal Reserve to announce a new form of economic policy this afternoon following their two-day FOMC meeting.

What type of economic policy? Well, that remains to be seen.

On Monday, we provided some analysis of a few possible strategies the Fed could announce today, but at the moment, most of us are expecting that the Fed will announce plans to “buy longer dated Treasury securities in a bid to hold down interest rates.”

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Unfortunately, “mortgage rates fall to new record lows,” loses its potentially profound significance when it’s virtually the same headline week in and week out.

As HSH.com’s resident expert Keith Gumbinger writes in the latest Market Trends newsletter, besides mortgage rates, what else is left to cheer about? Read the rest of this entry »

HSH.com VP Keith Gumbinger provides us with a “friendlier” version of the June Fed minutes which begin to describe how it will begin to remove itself from the market and the impact it may have.

The minutes from the June Fed meeting were released yesterday, revealing a general format for how the Federal Reserve will end and exit all the extraordinary programs (”policy accommodation”) it employed to help push the economy out of the recession.

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