The Federal Reserve board met this week and voted to leave rates unchanged for the 7th meeting of this year.  In their comments, they said the economic growth has slowed, household spending is increasing but is restrained due to unemployment, home values and restrictive credit.  They do expect economic growth to be modest in the near term.

The Fed also highlighted strengths in the economy:

  1. Growth is ongoing on a national level
  2. Inflation levels remain exceedingly low
  3. Business spending is rising

The Fed said it was prepared to take additional steps to improve the economy.  They didn't announce specific plans but most assume that means they may increase the bond-purchasing program in the future.  When the Fed was purchasing mortgage backed securities last year, it helped keep interest rates down.  Right now they are reinvesting their principal payments on securities holdings.  This should help keep rates lower for an extended period of time.  They may not stay this low (low 4% range for conventional and FHA 30 yr mortgages) but hopefully this will keep them lower than expected.

Because of this, we did see a small improvement in interest rates Tuesday afternoon.  The Fed is expected to leave rates alone for an extended period of time.  We don't know how long rates will stay where they are, but right now mortgage interest rates are fantastic.  If you are thinking about buying or refinancing your home, it is an excellent time to do so!!

Leslie Vanderwerf, Advisors Mortgage - EmailWebsite

About Leslie Vanderwerf

Currently a Branch Manager for American Mortgage and Equity Consultants, Inc., it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

Related Posts

FHA loan limits dropping

In 2008, the Housing and Economic Recovery Act was passed and it allowed conventional and FHA loans to increase their maximum mortgage.  In certain areas, conventional loans were allowed up to $729,000 but in Minnesota, the maximum stayed at $417,000.  FHA loans were allowed to increase to $365,000 in the Minneapolis/St Paul metro area.  That.

Read More

Helping you get your purchase agreement accepted!

As homes continue to fly off the market, what can you do to stand out in multiple offers?  This spring the housing market has picked up and I am seeing my borrowers getting into multiple offers and homes selling before they can even write an offer. I had a friend tell me that she listed.

Read More

How can student loan debt affect your mortgage qualification?

Student loans are a big deal these days!  Most people going to college are taking out at least some student loans.  In 2013, the average student that used student loans graduated with over $28,000 in student loan debt.  So how will that affect your mortgage qualification? Every lender looks at your total income and your.

Read More