After spending the last couple of years framing interest-rate policy in terms of calendar dates, the Federal Reserve abandoned time-based monetary policy in favor of pursuing a more goals-based one. At the moment, and regardless of any declared finish line, mortgage and other interest rates are going nowhere fast.

Record-setting week

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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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A combination of mixed economic news and an ever-impending fiscal cliff pushed mortgage rates down just a little last week. Hurricane Sandy’s distortion of some of the latest economic data make it hard to clearly discern the underlying trend, but there’s nothing we can see which suggests that any imminent spurt of growth is forming anywhere.

Mortgage rates down all around

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Below is an excerpt from the latest Market Trends newsletter, available Friday night in your inbox:

With another week of relatively disappointing economic news to digest, mortgage rates drifted aimlessly, collectively bouncing slightly off recent lows, if moving at all.

Meanwhile, the Federal Reserve concluded their two-day meeting last week by deciding to do simply more of the same as they will continue both Operation Twist and buying mortgage-backed securities through the end of the year.

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Below is an excerpt from the latest Market Trends newsletter, available Friday night in your inbox:

Mortgage rates continued to set new record lows last week, as the Federal Reserve reported that economic activity expanded at a moderate pace across its 12 districts.

HSH.com’s broad-market mortgage tracker — our weekly Fixed-Rate Mortgage Indicator (FRMI) — found that the overall average rate for 30-year fixed-rate mortgages fell by four basis points (0.04 percent) for the week to 3.99 percent, a new record low.

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A resurgence of troubles in the Eurozone has driven mortgage rates to fresh “all time” lows. Investors continue to sell holdings of equities and stuffing those proceeds into Treasuries, cash and other safe haven investments, keeping downward pressure on rates. The Fed of course is also continuing to run Operation Twist, which also helps long-term rates to remain low.

Economically, the latest data presented a mixed bag of news, offering little clarity or suggestion of direction. Meanwhile, fantastically-low rates are at least causing some interest among potential homebuyers. Read the rest of this entry »

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 »

While the economic data out this week couldn’t easily be characterized as “great”, the collective tenor of the available reports was arguably the most solid in some time, lending at least a little hope that we will not slide into recession as we close 2011.

This pulled some money out of hiding, and the stock market had a little better time of it for at least the time being. To the extent that things aren’t getting economically worse at the moment suggests that mortgage rates might stabilize at bit. After a small upward blip two weeks ago, mortgage rates sported a small downward blip last week (ending October 7). Read the rest of this entry »

The volatility in the mortgage market has been rather pronounced in recent weeks, including last week following the announcement of the Fed’s “Operation Twist” program.

Yet, after weeks of new record lows, mortgage rates managed a slight tick upwards last week.

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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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