The Federal Reserve made the long-awaited, much-anticipated announcement on Wednesday afternoon that federal funds target rate will increase by 25 basis points up to one-fourth to one-half percent. The target rate had been zero to one-fourth since June 2006. The announcement came as the Fed wrapped its eighth and final Federal Open Market Committee meeting of 2015. The vote to raise the federal funds target rate was unanimous.
The Fed’s move was widely applauded by those in the mortgage industry. Five Star Institute President and CEO Ed Delgado stated, quote, The housing market and the overall economy have continued to show signs of improvement throughout 2015. As the year comes to a close, this decision represents a strong statement of faith that the long-term fundamentals of the market point to a period of growth and sustainability. The cause of homeownership is well served by the Fed's move today. End quote
The Federal Housing Finance Agency, conservator of Fannie Mae and Freddie Mac, reported that the GSEs have completed almost three million home retention actions since the beginning of the conservatorship in September 2008. In the FHFA’s Foreclosure Prevention Report for the Third Quarter of 2015 released Wednesday, the Agency reported that Fannie Mae and Freddie Mac have completed a total of nearly 3 point 6 million foreclosure prevention actions in the history of the conservatorship as of the end of Q3 2015—and more than 2 point 9 million of those actions have helped struggling borrowers stay in their homes.