Lowest Rates in 4 Months, So Why Does Fed Say They're Going Higher?
This week, mortgage rates officially hit their lowest levels in 4 months, as the latest inflation data was revealed.
This is a welcome reprieve for prospective homeowners and shows that the central bank's efforts to keep costs low have paid off. However, despite this progress, members of the Federal Reserve continue to emphasize that they plan to maintain high interest rates “for as long as possible.”
The market has seen an unprecedented amount of volatility over the past year due to inflationary pressures. The benchmark 30-year fixed-rate mortgage rate hasn’t been lower than it is now since mid September. Since then, we’ve seen highs of nearly 7.5%, signaling how intense the up and down swings can be.
Get A Mortgage Rate Quote From Today's Market
More recently though, we’ve seen some positive news from government reports regarding inflation and consumer sentiment. Unemployment has also remained surprisingly low despite the continued uncertainty caused by COVID-19 and its effects on global markets. All these developments have helped drive rates lower but many are wondering if they will stay low or if they will eventually start to rise again in response to any potential new monetary policy announcements from the Fed.
Ultimately it remains unclear what direction mortgage rates will take in the near future but one thing is clear - right now is still a great time for prospective homeowners to lock in some favorable lending terms while they last!
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Lock / Float Advice
If I were considering financing / refinancing a home & it was closing in the timeframes listed below, I would...
Float Cautiously
< 15 Days
Float Cautiously
15-30 Days
Float
30 + Days
These are my professional opinions and not those of Homespire Mortgage Company. I formulate these opinions with the help of various experts in the real estate, mortgage, & finance communities. This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
TL;DR Cliff Notes
Sam Khater, Freddie Mac's Chief Economist, noted that while mortgage rates have returned to a downward trend, the market is still extremely sensitive to rate changes, causing large swings in purchase demand with only minimal variations in rates. He went on to say that over the past few weeks, it has become clear that buyers are actively entering and exiting the market as rates move.
The economic news looks to be on the lighter side this week. On Monday, markets will be closed in observance of Martin Luther King Jr. Day. Wednesday brings the release of Retail Sales data, an important report because consumer spending makes up almost 70% of the economic activity in the United States and is a major indicator of growth. Thursday will feature the Housing Starts report, and the week will wrap up on Friday with the Existing Home Sales report.
Mortgage rates and housing prices have improved compared to the higher points of last year! If you are in the market for a mortgage loan, contact me today to help simplify your application & expedite your approval.
These are my professional opinions and not those of Homespire Mortgage Company. I formulate these opinions with the help of various experts in the real estate, mortgage, & finance communities. This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.