Good morning! It’s just before 7:00 am PST as I’m writing this post. In a couple of hours, we’ll hear the announcement from the FOMC wrapping up their two day meeting on measures they will take to get inflation in line, which includes adjustments to the Fed Funds rate. The Fed Funds rate does not directly impact mortgage interest rates (except for HELOCs attached to the Prime rate), however the action the Fed takes does influence the direction of mortgage interest rates. Mortgage interest rates are based on bonds (mortgage-backed securities or MBS) and react similarly to stocks. Inflation is the “arch enemy” of bonds, which is a big part of why mortgage rates have been higher these past few years. Should the Fed indicate that inflation is taming and investors believe what the Fed is saying, we should see mortgage rates improve…and of course, the opposite is true. [Read more…]
It’s Fed Day! [Live Post] No Change to the Fed Funds Rate!
It’s Fed Day! Will they Pause or ? [Live Post]
10:15 am: As I begin this post, we are about 45 minutes from knowing if the Fed is going to “pause” on hiking the fed funds rate, or if the hikes will continue.
Typically, mortgage rates would be improved right now already factoring in the pause, which would indicate that inflation is taming. Inflation retreating is good news for mortgage interest rates since mortgage rates are based on bonds (mortgage-backed securities). Right now (10:17 PST), MBS for 30 year 5% are down about 10bps. [Read more…]
LIVE: It’s FED Day! Fed increases rates by a half point.
6:49 a.m. Well… it’s kind of a live post – I will be updating this post throughout the day. This morning, all eyes are on the FOMC (aka “the Fed”) as we wait to learn how much the Fed funds rate will be adjusted. It is anticipated that the Fed will push the rate 0.500% higher today. This will directly impact loans that are attached to the Prime interest rate, such as home equity loans and many credit cards with variable rates. [Read more…]
Fed increases Funds Rates by 0.75 Percentage Points
Today, in a move that probably surprised nobody, the FOMC increased the Funds Rate by 0.75 percentage points to 2.500%.
In addition, the Fed reiterated their commitment to reduce their holdings in Treasury/mortgage-backed securities and agency debt.
Mortgage rates reacted favorably as this increase was highly anticipated by the markets.
What will not be reacting so favorably are credit cards, home equity loans and other debts where interest rates are attached to Prime as the Prime Rate follows the Fed Funds rate.
PLEASE pull out your credit card statements, and any other debts to do a “checkup” on what your interest rates are. I’m happy to review your credit cards with you to see if refinancing or a second mortgage makes sense for your financial scenario.
Mortgage rates pushing higher
Mortgage interest rates have been moving higher at a pace not seen in years. If you’ve been a subscriber to The Mortgage Porter, you may recall that I often say mortgage rates move up much faster than they come down…the jump over the last few days has surprised many. [Read more…]
Fed Raises Funds Rate a Half Point
Today wrapped up the two-day FOMC meeting and Chairman Powell announced that the funds rate will be increased by a half point. As of today, the federal funds rate is 0.75-1% and is expected to another 2 percent by the end of the year.
From the FOMC statement: [Read more…]
Mortgage Rates on the Rise
Mortgage interest rates have been pushing higher with the Fed pulling out of buying mortgage-backed securities and inflation. Check out Freddie Mac’s latest Prime Mortgage Market Survey that was published this morning. NOTE: Rates posted below are EXPIRED – for current mortgage rates based on your personal scenario for homes located in Washington state, please click here.
Fed Leaves Rates the Same BUT…
The Fed’s announcement today to leave the funds rate unchanged was not a surprise to the markets. What did send the bond market in a tizzy this afternoon was that the Fed ever-so-slightly moved the goal posts out a bit for inflation. [Read more…]
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