In this article, we will cover and discuss how the FED interest rate freeze affecting the booming housing market. The news of the FED Interest Rate Freeze on March 20th, 2109 surprised many. The FED Interest Rate Freeze comes weeks after the news of the FED Leaving Interest Rates Unchanged For the First Quarter of 2019. The FED Interest Rate Freeze news automatically sent mortgage interest rates to a 13-month low of 4.23%. The FED Interest Rate Freeze is great news for both home buyers and homeowners. In this blog, we will discuss what the FED Interest Rate Freeze means to home buyers and homeowners in 2019.
How The FED Interest Rate Freeze Is Affecting Housing Prices And Mortgage Rates
Housing prices have been increasing exponentially since 2012. Many areas such as Texas, Florida, Georgia, Kentucky, Ohio, Colorado, Pennsylvania, and dozens of other states have experienced massive housing growth. On the flip side, many home buyers in certain states like New York are leaving to other lower-taxed states. Countless residents are fleeing New York due to rising taxes and the high cost of leaving. Therefore, many home buyers are leaving the state to other lower-taxed states. Home prices have been increasing despite high mortgage rates in 2018. The main reason for home prices increase was very low inventory.
The Federal Housing Finance Agency Increases Conforming Loan Limits
The Federal Housing Finance Agency increased conforming loan limits for 2019 to $484,350 due to rising home prices. HUD, the parent of FHA, followed the FHFA lead and raised FHA Loan Limits for 2019 to $314,827. HUD increased FHA Loan Limits for three years in a row. With news the Federal Reserve Board will not increase interest rates for the remaining of 2019 and has lowered mortgage rates to a 13-month low. We anticipate mortgage rates to slide even further in the weeks and months to come.
Who Will Benefit The Most With FED Interest Rate Freeze In 2019
Homebuyers will have more buying power with the lower mortgage rates to come in 2019. Homeowners who purchase homes in 2018 will receive the greatest benefits. Mortgage interest rates in 2018 have been the highest since the aftermath of the 2008 Great Recession. Mortgage Rates hit a bottom back in 2013 when rates were 3.25%. Many home buyers who purchased home in 2018 had rates north of 5.0%. Lower credit score borrowers got rates as high as 5.75%. The refinance market has been dead for the past three years due to high mortgage rates. Many small mom-and-pop mortgage broker shops were hurting due to the freeze in the refinance market. Mortgage rates hit a 13 month low on March 21st, 2019 after the FED announced they will freeze rates for the remaining of 2019. Many industry experts and economist predict that mortgage rates will continue to slide in the coming weeks and months.
VA And FHA Refinance Mortgage Loans Expected To Become Very Popular In 2019
VA and FHA are the only two mortgage programs that offer streamline refinancing. Homeowners with VA and FHA Loans who have closed their home loans in 2018 will definitely benefit from VA and FHA Streamline Refinancing. Streamlines do not require home appraisals and/or income documentation. There is no credit score refinances and credit qualified streamlines. Borrowers who have higher credit scores will get the lowest rates on VA and FHA Streamline Refinance Mortgage Loans. Streamlines offer very limited documentation. Most streamlines can close in 21 days or less. Borrowers have no cost out of pocket. They also get to skip two months of mortgage payments on VA and FHA Streamline Refinance Mortgages.
FED Interest Rate Freeze Affecting Booming Housing Market With Low Mortgage Rates
The announcement of the rate freeze by FED on March 20th, 2019 has affected mortgage rates. The rate-freeze by FED means that there will not be any more interest rate increases for 2019. The news of the rate freeze by FED for 2019 has already affected mortgage rates. Mortgage rates decreased after the news of the rate freeze by the FED. This means great news for home bu\yers who were priced out of the market since last year due to very high mortgage rates. Mortgage rates hit a 13 month low this week. In this blog, we will discuss the positive and negative effects of the rate freeze by FED.
What Happened This Week on FED Interest Rate Freeze
Many industry experts expect mortgage rates to continue to drop this year. To home buyers, this is great news. To homeowners who purchased homes last year at the peak, many can refinance mortgages. Mortgage rates have been declining during the first quarter of 2019. Many home buyers purchased homes last year with mortgage rates as high as 5.75%. Now, these homeowners are in the game to refinance their high-interest home loans as rates continue to slide.
Recap on the FED Interest Rate Freeze
Here is the recap for this week:
Mortgage interest rates hit a 13-month low this week to 4.23%. The Dow Jones Industrial Average dropped over 400 points today due to concerns overseas and the reason why the FED is not increasing interest rates in 2019. Homebuyers and homeowners can benefit from the lower interest. Bad news in the marketplace means lower mortgage rates.
What Experts Said About FED Interest Rate Freeze
In the fourth quarter of 2018, many economists and industry experts predicted that interest rates will continue to rise throughout 2019. They predicted that mortgage rates will continue to rise in 2019. With the rate freeze by FED and mortgage rates dropping, these experts are proved wrong. Mortgage rates have been continuously sliding for the first week of 2019. Today’s mortgage rates are at 4.23% which is the lowest it has been in 2019.
All indications point to lower mortgage rates for the remainder of 2019. Lenders are looking for the refinance market to come back. Many borrowers closed loans at a high 5.0% rate last year. Many will benefit from lower rates to be able to refinance their home loans this year.
March 24, 2019 - 4 min read