Interest Rates Unchanged After The Fed’s Wednesday Meeting
After its meeting this Wednesday, the Fed voted to leave interest rates unchanged, keeping its benchmark rates at 0.75-1.00%. The decision was a response to the economy’s slow .7% growth in the year’s first quarter. Much of this slowing growth can be attributed to the transition period following the presidential election, so the Fed remains optimistic for future economic growth. In that case, two more rate increases are expected by the end of the year. The next rate hike is expected to occur in June as long as the economy continues to grow, while many experts expect a second increase to occur in September.
Overall, the decision seems to have had a very slight indirect effect on mortgage rates. As of Thursday, the average 30-year FRM was down about 1 basis point, hovering around 4.02%, while the average 15-year ARM and remained around 3.27%. And, though rates are always changing, many experts don’t expect them to increase dramatically between now until the end of the year. Many economists expect the 30-year FRM to fall between 4.2-4.5% at the end of 2017.
For some, these rates might seem to be way too high. After all, for most of the summer of 2016, the average 30-year FRM was about 3.75%. However, keep in mind that mortgage rates were approaching record lows for a lot of 2016, and they were bound to increase at some point, especially if the economy has kept improving (which it has). Now, most experienced economists imagine that mortgage rates will remain above 4% for the foreseeable future. More specifically, forecasters like Fannie Mae, Freddie Mac, and the Mortgage Bankers Association predict that the average 30-year FRM will fall somewhere around 4-4.3% for most of the rest of the year.
And, it’s always worth mentioning that a fixed mortgage in the 4% zone is an extremely competitive rate and a wonderful opportunity to save in the long run. Most homebuyers in the 1980s would have been over the moon if realtors offered them a 4.3% 30-year FRM, so it seems a tad spoiled to grouse over rising rates now. Historically speaking, rates are still extremely low, so don’t worry if you failed to cash in on the jaw-dropping rates of 2016. You still have a chance to lock in a great rate this year.
However, as it seems likely that rates will continue to rise over the coming months, time is of the essence. To lock in a low mortgage rate today, contact Pickett Street at info@pickettstreet.com or contact Cody Touchette, MLO # 83216, Pickett Street’s preferred lender.
Sources:
http://www.cnbc.com/2017/05/03/fed-leaves-rates-unchanged-at-may-meeting.html
http://www.cnbc.com/2017/05/03/fed-to-markets-june-rate-hike-coming-your-way.html
http://www.bankrate.com/finance/mortgages/housing-trends-1.aspx