Fixed mortgage rates are up from yesterday.
Mortgage Bonds are currently trading down 25 points this morning. Yesterday we saw mortgage bonds sell off, wiping out earlier gains. This caused lender to re-price during the day and mortgage rates increased by .25% from their lows in the morning.
The Fed kept rates steady at 0-.25%, which was no surprise. They did state that they anticipate “economic conditions are likely to warrant exceptionally low levels of the Federal Funds Rate for some time” and that “inflation pressures will remain subdued in coming quarters”. This news is good for keeping mortgage rates in a low range for the months to come, but it doesn’t necessarily mean that Mortgage rates will fall to 4.5%.
The Fed went on to say that they plan to continue to purchase large quantities of Mortgage Backed Securities in hopes to support mortgage and housing markets. Again, this is good news for Mortgage rates but still doesn’t mean that rates will fall to 4.5% or lower because the Fed want them to. We all must remember that the Mortgage Backed Securities Market is a free trade market and while the Fed buying large amounts of bonds helps rates, there are investors from every almost every country in the world investing in these markets. There are trillions of dollars exchanging hands and anything can happen to cause Mortgage Rates to move in one direction or the other. My point is that when our customers find a rate that they are comfortable with…LOCK because it may not be there tomorrow; or in 5 minutes for that matter, as we saw yesterday.
Current Outlook: Cautiously floating after the damage from yesterday