I like writing a “live post” with updates throughout the day to attempt to illustrate how mortgage rates (or the pricing of mortgage rates) can fluctuate throughout the day.
Today the two day Fed meeting wraps up and we’ll learn if the Fed is going to raise the Fed Funds Rate. Following the announcement from the Fed (around 11:00 am PST), we will have commentary from Fed Chair Janet Yellen. While the Fed doesn’t directly dictate what mortgage rates will be, their actions certainly influences mortgage interest rates.
Click here for a mortgage rate quote for your home in Washington.
Mortgage rates that I post today will be based on the same criteria that I use for my weekly rate posts on Mondays and are subject to credit approval. Rates quoted are based on a purchase in the greater Seattle – King County area with a sales price of $500,000, 20% down payment and a conventional loan amount of $400,000. The home buyers have excellent credit with credit scores of 740 or higher and the transaction is closing by October 26, 2015 or sooner.
As of 8:13 am, the Dow is up 16.67 at 16,756. MBS (mortgage backed securities) are barely in the green, ahead of the Fed announcement.
- 30 year fixed: 3.875% (apr 4.015%) priced with 1.151 points. NOTE: Mortgage rates have changed. Please scroll down. For your mortgage rate quote on your home in Washington state, please click here.
UPDATE 10:55 am PST: No change since my last post to mortgage interest rates. DOW is up 51.58.
UPDATE 11:06 am: The Fed leaves rates unchanged. MBS improving. We should see pricing for mortgage rates improving too.
From the Fed’s Press Release:
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.
No wonder MBS are reacting favorably!
UPDATE 11:38 am: Janet Yellen is reading her commentary regarding the Fed’s rate decision today. She’s indicating that it’s unlikely that the Fed will change rates until next year. They forecast that Fed Funds rates may change mid-2016. Dow up about 41.
The Fed projects the Fed Funds rate may increase to 1.5 in 2016, 2.5 in 2017 and to a more normal level of 3.5 in 2018.
UPDATE 11:44 am: Dow now up 87. Mortgage rates still unchanged from my earlier quote.
UPDATE 12:15 pm: We finally are seeing an improvement to mortgage rates. 3.875% has improved by 0.44 points/fee.
- 30 year fixed: 3.875% (apr 3.978%) priced with 0.711 points.
UPDATE: 12:24 PM: Dow is now down 54 and was up 176 about a half hour ago…
UPDATE: 1:51 PM: Dow closed down 65 points. Mortgage rates are unchanged from my last quote at 12:15 pm.
Stay tuned! I will continue to update this blog post throughout the day. You can learn about updates to this post via Twitter or Facebook.
[…] little bouncy lately and remain very low. There has been a lot of “Fed speak” following last week’s Fed meeting with various flip flopping commentary on when the Fed Funds rates may be raised. This Friday we will […]