MARKET UPDATE / BIG NEWS IN MORTGAGE RATES & HOUSING

Today’s market, Today has multiple items scheduled, but it is the afternoon calendar that we need to prepare for. August’s Housing started at 8:30 AM ET. It gives us a measurement of housing sector strength and mortgage credit demand by tracking construction for new homes. It is expected to show an increase in new home starts between July and August. BIG NEWS Fed Chairman Bernanke and friends will take center stage today…..Chairman Bernanke will do so literally. It is expected that Fed won’t change key short-term interest rates at this meeting, but there speculation in the markets that they will take steps towards winding down their bond buying program (QE3). Tapering has been spoken about over the past several months and we have finally reached the day of truth for all those predictions. I would not be surprised to see a minor reduction in the monthly bond purchases. In my opinion I don’t believe that there has been enough economic growth to see a rate increase yet. The market did not gain the momentum that the Fed was expecting over the summer months, at least not enough to justify a reduction. The Fed is currently buying $85 billion a month in government and mortgage-related securities. HAVE A SUPER DAY!