Mortgage rates change on a daily basis, sometime very little, sometimes a lot! By the time we truly know what is going to happen, it’s already happened!
Rates depend on expectations of investors so good economic news can be bad for interest rates. An active economy raises concerns about inflation and that can cause bonds to lose value – which means interest rates would increase. If there is concern about the economy, rates may fall.
When there is turmoil in different areas of the world, investors tend to turn to bonds sold by the government as they are more secure. When that happens, rates tend to decrease. Â If our economic reports come out showing bad news – such as less new jobs than expected – rates tend to decrease.
But at the same time, mortgage investors are looking to the future and what they expect to happen. So when the Fed raised rates in June, the market didn’t respond immediately – they had already priced in a rate increase, expecting the Fed to raise rates. Â Now they are looking to other economic reports and expectations on when the Fed may raise rates again. Â As our economy keeps showing signs of improvement, rates will slowly increase. Â We can’t guarantee what will happen or when it will, but the expectation is that rates will continue to slowly increase. There will be weeks or days when the rates may fall, but it all depends on the investors expectations of what is going on in the economy!
At this point rates are still fantastic and it’s a great time to buy a home or refinance your current mortgage if you have not been able to. Â There is discussion that the Fed may not raise rates again this year, but we won’t know that for sure until the end of the year!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
