Feds Cause Mortgage Rates To Drop This Week
Feds Cause Mortgage Rates To Drop This Week. After the Federal Reserve Board’s meeting on March 2015, mortgage rates have been consistently dropping. Both 30 year fixed mortgage rates and 15 year fixed mortgage rates on conventional loans have been dropping despite rumors that mortgage rates will be going up the second half of 2015. Even with rumors that the Feds were going to increase mortgage rates, the news this week have caused the Feds Cause Mortgage Rates To Drop This Week. The Federal Open Market Committee, also referred to FOMC, has elected to leave the Fed Funds Rate at the current level which is near 0.000%. The vote was a ten to zero vote which most economists and mortgage industry experts expected it. Mortgage Rates is still at a historical low and even though it is higher than when mortgages were at May 2013, mortgage loan borrowers can still take advantage of the low mortgage rates today.
Economic Data Affects Mortgage Rates And How Feds Cause Mortgage Rates To Drop
It was determined that although household expenditures is moderately increasing and fixed business investment is growing slightly, the fact remains that the housing market in the United States still remains slower than expected and the growth of export goods has weakened. The Federal Reserve Board was satisfied with the employment data. The Federal Reserve Board is going by the unemployment numbers released several weeks ago that the job market is strong on the jobs report numbers that stated that the unemployment rate has fallen to its lowest numbers since the 2008 real estate crash as well as the report that over 10 plus million jobs have been created since 2010. Unemployment rates, employment creation, and inflation are the three major factors the Federal Reserve Board is primarily concerned when it comes to raising interest rates. Low inflation numbers translates to low mortgage rates. The Federal Reserve Board expected inflation rates to be at 2% but it was more like 1% and this is one of the causes of mortgage rates dropping. As of today, mortgage rates are at the lowest levels in weeks with no signs of spiking up.
Federal Reserve Board Meeting And Mortgage Rates
As mentioned above, mortgage rates have been dropping after the March Federal Reserve Board meeting and continues to drop to this day. Industry experts and Wall Street expect mortgage rates to be volatile into the following weeks to come with the announcement of economic reports expected to come out and future announcements from the Federal Reserve Board.
Housing Market With Uncertain Mortgage Rates
Housing purchase remain strong and is expected not to be affected with mortgage rates. One of the advantages for home buyers was the reduction of the FHA annual mortgage insurance premium being lowered from 1.75% to 0.85% and Fannie Mae and Freddie Mac reviving the 3% down payment on home purchases on conventional loans for first time home buyers.
Risk With Refinances
With the volatility with mortgage rates, homeowners currently in the refinance mortgage process or planning on refinancing their current mortgage loans should have their loan officers keep a tight eye on mortgage rates and its volatility. Nobody has a crystal ball on which direction mortgage rates will go so make sure if the mortgage rates remain low to lock the mortgage rate on your loan. Back in May 2013, millions of homeowners who were in the middle of refinancing their home loans could not go through with it due to mortgage rates going up literally overnight. I personally know of a mortgage brokerage company that specializes in refinance mortgage loans that had over 100 refinance mortgage files in their pipeline that could not close any of them and almost ended up bankrupting them due to mortgage rates going up over a point in a short period of time.
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