In a couple of hours, the FOMC will wrap up their two-day meeting with an announcement on their decision on if they are going to make adjustments to the Fed funds rate. The Fed funds rate does not directly affect mortgage interest rates (except for HELOCs) however, it does influence the direction of mortgage rates. This is because the Fed’s decision is based on the level of inflation. Mortgage rates react negatively to inflation as mortgage rates are based on bonds (mortgage-backed securities/MBS). So, when the Fed raises the funds rate or keeps the rate unchanged due to inflation being too high, mortgage rates tend to move higher. If inflation is in line, we often see mortgage rates improve. [Read more…]
It’s Fed Day! [LIVE POST]
June 12, 2024 by Leave a Comment
Mortgage Rates Improved!
November 10, 2022 by Leave a Comment
Mortgage interest rates are having one of their best days in months following the CPI report released this morning showing better than expected data on inflation. Yes, inflation is still high but this morning’s report indicates that it may be starting to correct. [Read more…]
Mortgage Update for the Week of December 12, 2010
December 10, 2012 by Leave a Comment
Mortgage rates continue to be very low levels. Freddie Mac has been reporting average interest rates for 30 year at under 4% for the last year with 15 year fixed rates being under 3% for the last six months.
While the Fed works at keeping rates at artificially low levels, Congress is considering increasing the guarantee fees to new conventional mortgages to help fund programs that have nothing to do with Fannie Mae, Freddie Mac or even the housing recovery. The guarantee fees (aka g-fees) are factored into the pricing of a mortgage rate. FHA mortgage loans are also becoming more expensive in 2013 with the increase of mortgage insurance premiums.
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