The Federal Reserve Board met yesterday and said that they did not have plans to raise interest rates, meaning the Fed Funds short term Rate, through 2014. The Fed statement noted some growth in the US economy, but also noted significant downside risk, based largely on the possibility of contagion from the Eurozone debt crisis.
And, as a result: stocks took off, and bonds, well, not so much. Bonds sold off and continued that on Wednesday, pushing mortgage rates higher by about 1/4 point. And if the Fed’s worry about the Eurozone debt crisis making its way to our shores, then we will see at least some inflation, causing Bonds and therefore mortgage rates to continue climbing higher.
But then, we have been bouncing off a low ‘support’ level for a few weeks, meaning rates had no room to move lower, and plenty of room to move higher.
It is hard to tell if rates will settle back. In the morning the weekly jobless claim and other data will be published, and if they are positive for the economy, then rates will be under further pressure to move higher.
So, my best advice based on the news coming out and the data is to lock quickly if you are considering buying a new home or refinancing your home. Low rates can’t and won’t last forever. Now is the time to act.
Now is the time to lock.
Click Here to get a mortgage rates quote; or call us at 1-800-MY-LOANS (1-800-695-6267).