Mortgage interest rates have been very steady for the couple of months. There has been a little change here and there, but not much movement. The Federal Reserve met this week and after the meeting released a statement that basically said they were leaving interest rates alone, they also confirmed that they were going to leave rates at 0.00-0.25% until sometime late in 2014. The Fed rate has not changed since December 2008. Five years ago it was 5.25%!
In the statement that was released, they also commented that there has been some economic improvement and that the economy has "expanded moderately" since their last meeting in January 2o12. The Fed also added that there are significant risks out in the global economy with Europe and Greece and that it could fall over to the US.
With the announcement and the comments reflecting a slightly better economy and employment numbers increasing, the stock market improved and mortgage rates got worse! There was a huge sell off of mortgage backed securities as investors pulled out of the safer bonds and moved money into the stock market. Wednesday we saw rates increase between .125-.25% – they are still wonderful however if you are looking to buy or refinance, you will want to lock in sooner than later.
Mortgage rates always increase before the Fed raises their rates, so this is common and it is also common for an immediate reaction to the Fed's statement. Usually it takes a day or so for everything to settle back but if there is continued good news for the economy, we may have seen the bottom of the interest rates. And we never know where the bottom is until rates have increased and it's too late to lock in!! If you are in the process of buying or refinancing, make sure you know where interest rates are so you don't get surprised!!
Leslie Vanderwerf, NMLS ID#335509, Summit Mortgage - Email – Website
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