The Federal Reserve Board has spoken. The question is–what did they mean? Chairwoman Yellen indicated that the Fed definitely will be raising rates this year because they are afraid if they don’t stay ahead of the curve, the economy will overheat. Yet, they are still concerned about the present economic slowdown. Well the statement does not sound very definitive to us.

What we believe the Fed is indicating is that they are not likely to raise rates in June, but are more likely to raise rates in September. But the September move will come only if the economic recovery hastens from here. This is actually what the markets have been predicting all along. At this point, we know the Fed won’t move if the economy does not heat up, and much of the speculation is centered upon what the Fed might do after they fire the first salvo.

Meanwhile, we approach the release of important data which will tell us if indeed the economy is starting to heat up. There is no more important indicator than the monthly jobs report. Yes, we had a slowdown in hiring during the winter, but weekly first time claims for unemployment continue to stay very low which makes the economists think that a pick-up in hiring is just a matter of time. This week we will find out if this prediction will hold true.

The Markets. Last week rates on home loans were up slightly. Freddie Mac announced that for the week ending May 28, 30-year fixed rates increased to 3.87% from 3.84% the week before. The average for 15-year loans also increased to 3.11%. Adjustables were mixed, with the average for one-year adjustables decreasing to 2.50% and five-year adjustables rising to 2.90%. A year ago, 30-year fixed rates were at 4.12%, which is 0.25% higher than today’s levels. Attributed to Len Kiefer, deputy chief economist, Freddie Mac — “Rates rose on home loans to the highest level in 2015 following positive housing market data. New home sales surged 6.8 percent to an annual pace of 517,000 units in April. Although existing home sales slipped 3.3 percent to a seasonally-adjusted pace of 5.04 million units, sales are up 6.1 percent on a year-over-year basis. The S&P/Case-Shiller 20-city home price index also posted a solid gain of 5 percent over the 12-months ending in March 2015.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.  

	Daily Value	Monthly Value
	May 28	April
6-month Treasury Security	0.08%	0.09%
1-year Treasury Security	0.26%	0.23%
3-year Treasury Security	0.97%	0.87%
5-year Treasury Security	1.51%	1.35%
10-year Treasury Security	2.13%	1.94%
12-month LIBOR		0.697% (Apr)
12-month MTA		0.166% (Apr)
11th District Cost of Funds		0.687% (Mar)
Prime Rate		3.25%

About 1.5 million new housing units are needed each year to accommodate the rising population, writes Lawrence Yun, the chief economist of the National Association of Realtors® in the Economists’ Outlook blog. Yet, housing starts have averaged about 766,000 per year for the past seven years. “These multiple years of undersupply compared to what is needed is the reason why much of the country is experiencing a housing shortage with few inventory of homes for sale and falling apartment vacancy rates,” Yun notes. “Consequently, rents and home prices are rising by at least twice as fast as wage growth.” Yun says that builders need to ramp up construction soon or the housing shortage will worsen. “Housing affordability will take a hit as a result,” he says. The U.S. has about 4 million births each year and about 2 million deaths each year – which means an annual population gain of about 2 million. Also, immigration is making up another half million to one million each year, which brings the U.S. population up by about 3 million each year. Source: NAR

Just because there isn’t a “For Sale” sign in a yard, doesn’t mean the homeowner isn’t taking offers. You just have to know the right person. Despite strong demand in many markets across the country, some homeowners are skipping the process of officially listing their home on the multiple listing services, leaving agents with the task of finding a buyer without publicly advertising it. And real estate professionals say these “secret” listings — commonly known as “pocket listings” — are becoming more popular. Kofi Nartey, a real estate broker at The Agency in Los Angeles, has recently seen an uptick in off-market lists. He says they currently make up around 10% to 15% of his firm’s sales. But in a seller’s market with bidding wars driving offers well above the asking price in some areas, why would a homeowner sell their home in secret? The reasons vary: some want privacy, others are testing the waters and some think the exclusivity can draw a higher sale price. “Many times I’ve had pocket listings where people will say, ‘If I get this number I will sell, otherwise I have no desire,'” said Jade Mills, a real estate agent with Coldwell Banker Residential Brokerage in Beverly Hills, who recently sold a $38 million home off market. These secret listings make up about 10% of her sales, an increase from previous years. Source: CNN/Money