Market Update 01/26/2022
Volatility, Volatility, and more Volatility!! Welcome to the new paradigm. From the stock market to the interest rate complex, this year is bringing an outpouring of ups and downs in most market sectors. The Federal Reserve today announced a broad view of their path forward. This action and commentary goes hand in hand with what Chairman Powell’s statements have been conveying since the Fed’s last meeting. Reading between the lines, the new recipe book of the Fed is to curtail bond and mortgage purchases and shift towards hiking interest rates in March. Furthermore, in Chairman Powell’s news conference, he subtly mentioned that it is the Fed’s intention to divest of all of their mortgage holdings!! What does this mean? In a nutshell, increased rates and volatility in the equity markets are the new norm for the time being. The last few days have seen large gyrations in stock prices and interest rates.
So far this year, mortgage rates have increased approximately .75%. Even with these higher rates, the purchase market remains very active at all price points. We are recommending to take advantage of the still favorable interest rate environment with fixed rates in the mid to high 3% area or 7 0r 10-year adjustable-rate loans in the high 2% -low 3% level. No one knows how much longer these kind of rates will be available. Alternatively, bank statement programs, cash flow programs for investment properties, and asset qualifying loans are increasingly competitive and warrant discussion if traditional qualifying is problematic.
Stay Tuned and Hold On Tight!!!
We welcome your contact!
Gloria Shulman, Curtis Cohen, Ted Kachadorian, Coby Cohen, Ben Cohen & David Brayman