The Fed met this week and the best news is they held interest rates steady as expected. Here are some things you may want to know about mortgage rates and what is going on in the market.
Inflation and rising Treasury yields have continued to put pressure on interest rates unfortunately. A December rate hike by the Fed is still a possibility. The Fed voted 10-2 on October 28th to keep rates steady. The Fed Chairman left a December rate hike on the table without committing to the next move.
Inflation picked up in September. The Fed’s preferred inflation measure, the PCE price index rose 0.5% for the month, it’s biggest increase in six months, bringing annual inflation to 3.5%. This is well above the Fed’s target of 2%.
The Treasury yields rose despite the rate hold by the Fed. The 10-year Treasury climbed to 5.04% while the two year yield fell to 4.70%. This shows that the longer term rates are still rising.
Energy costs and AI investment add uncertainty to the market. Fed officials shared concerns that the higher energy costs and growing AI investment could push prices higher and that could complicate future rate decisions.
For those looking to buy a home now, some sellers are lowering prices but it depends on the home and how long the home has been on the market. We are hoping rates come down this winter, but no one knows for sure!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
