This BLOG On Mortgage Rates Have Recently Been Dropping Was UPDATED On June 21st, 2019
30 year fixed FHA mortgage rates have been as low as 4.25% and 30-year fixed Conventional mortgage rates have been as low as 4.5% earlier this year.
- FHA mortgage rates have spiked up to the upper 4.0%
- Conventional mortgage rates have climbed to over 4.5% just as recently as a few weeks ago
- The great news is that both FHA and conventional mortgage rates have been steadily dropping the past several weeks
- It is still much higher than it was earlier this year and highly volatile, but at least it is making a correction
What Is Causing Mortgage Rates Have Recently Been Dropping
The reason for the highly volatile mortgage rates in the past several weeks is due to the Feds and their indecisive comments and uncertainty. This has created a highly volatile mortgage-backed securities markets. Mortgage-backed securities are also known as MBS.
Federal Reserve Chairman Comments Has Shaken The Mortgage Markets
Federal Reserve Chairman Jerome Powell told the Joint Economic Committee that he saw a great improvement in the United States economy. He also predicted that the economy will continue to improve and due to the overall improvement in the economy and consumer confidence that his intention was to slow down the pace of purchasing bonds.
- This statement to the Joint Economic Committee has skyrocketed mortgage rates to the largest single-day mortgage rate hike in history
- Mortgage rates have skyrocketed to a two year high in a two month period due to the statement by Federal Reserve Chairman Jerome Powell last year in 2018
- Many refinance borrowers who had to refinance mortgage loans in the pipeline and did not lock their rates have literally seen their refinance deals evaporate
- I know of dozens of lenders who had hundreds of refinancing deals on their pipeline lose all those refinance mortgage files
Federal Reserve Chairman Jerome Powell Does A 180 Degree Turnaround And Shakes Up The Mortgage Markets Again
On September 18, 2018, Federal Reserve Chairman Jerome Powell said that by restricting the financial conditions in recent months, and by continuing to restrict bond buying, that this will cause a slow down in the pace of improving the economy and the labor markets.
- He said that the Federal Reserve Board will wait to see more evidence before they will restrict in decreasing in purchasing bonds
- This news improved mortgage-backed securities positively improving it by more than 100 basis points.
- If mortgage-backed securities pricing improves then mortgage rates goes down
- With this statement, mortgage rates have plummeted over 0.25%
- Current 30-year mortgage rates are at 4.25%, which is down from the recent high but still is higher by 0.75% than it was back in May
Where Are Mortgage Rates Headed With Unemployment Numbers And The Recent Government Shutdown
Nobody can predict where mortgage rates are headed.
- The unemployment numbers seem very inaccurate
- This is because so many people gave up looking for work and millions are not reporting their unemployment or are underemployed
- With the recent federal government shutdown, the uncertainty has been greater than ever before.
- Federal Reserve Board Jerome seems confused at best
- He also seems more like he is totally lost and needs to think things through before he makes statements like he has been doing
- His statements shake up the whole mortgage markets and affect the economy due to his uncertainty
Actions Of The Federal Reserve Board
The Federal Reserve Board may still restrict bond purchasing in December but who knows. It all depends on how many jobs are added to the U.S. economy, economic growth, inflation figures, and unemployment numbers.
Federal Reserve Board Chairman Jerome Powell is expected to recommend an interest rate drop:
- We are predicting that the mortgage markets will be extremely volatile from now and throughout 2019
- Mortgage Rates Have Recently Been Dropping may be great news for home buyers
- When Mortgage Rates Have Recently Been Dropping may also spike up the value of homes nationwide
This BLOG Post On Mortgage Rates Have Recently Been Dropping is updated on June 21st, 2019.