Although it may be a widely-held misconception that the Federal Reserve sets consumer mortgage rates, it can, in fact, have a significant effect on them. During the COVID pandemic, the Fed bought billions of dollars of consumer mortgages to help keep rates extremely low and thereby encourage spending.
Typically, the Federal Open Market Committee (FOMC) meets every six weeks to discuss interest rate policy. Their latest meeting was held March 15-16 and resulted in a quarter percentage point key short-term interest rate increase. The key rate, which has been near zero, is the interest rate at which banks can borrow from other banks, or in the short-term, sometimes directly from the Federal Reserve.
The committee’s expectation is to help slow inflation by gradually increasing rates throughout the year as the economy improves. Borrowing will become more expensive for consumers but, average home prices which have been increasing at about twenty percent annually, may rise at a slower pace.
• What this means to consumers looking to obtain a new mortgage is that they should likely do it as soon as possible to protect themselves from rising rates. In fact, rates may never be lower unless there is a serious economic downturn or even a recession.
• Today, borrowing costs are still historically low, but likely will not remain that that way. Additional hikes are projected throughout this year and next, and these increases will be passed on to consumers. Therefore, there may never be a better time in the foreseeable future to lock in a fixed rate mortgage.
With 17 years of experience in the home lending business, 1 Stop Lending’s professionalism, expertise and attention to detail is what separates us from the competition. We are contracted with some of the lowest priced lenders in the nation and provide all loan types, including conventional, jumbo, VA, FHA and USDA for purchases or refinances.
In addition to discounted mortgage rates, 1 Stop Lending offers unsurpassed customer service. Not only do we work fast, but our systems are completely paperless. 1 Stop Lending’s leading-edge technology keeps your loan moving swiftly and our advanced communication systems keep you informed throughout the process.
If you are interested in learning more about obtaining your next mortgage before rates rise higher, we are just one phone call, text or email away from answering any questions you have.
Please visit https://1stoplending.net for more info.