The Federal Open Market Committee announced on Wednesday of this week to leave the Federal Funds Rate unchanged within its target range of .25%.
The Fed maintained an outlook for the US economy that since last month economic growth remains slow, unemployment rates remain elevated, and the housing sector remains depressed. Obviously, this is not a surprise and it’s because of these factors the Fed chose to leave rates alone.
This news rattled Wall Street and the stock market took immediate loss for over 500 points.
So what was the market action like?
1.Fed leaves rates unchanged causes the stock market to aggressively sell off.
2.Fed announces plans to buy mortgage-backed securities and pledges to pump more money into the housing sector.
So what happened with mortgage rates?
Mortgage rates rallied 150 basis points for an improvement in trading on Wednesday afternoon as well as into yesterday. This has allowed us to see very low fours with zero points on 30 year fixed-rate mortgages.
15 year fixed-rate mortgages and 10 year fixed-rate mortgages also rallied.
So we have wonderful mortgage rates right now Scott, “Maybe we should wait to lock in our rate to see if we can get something even better?” I was asked this question this week at least 15 times. Each time my response was exactly the same we could wait to lock in your interest rate and risk giving up big gains of the Fed’s action or we can lock in now because there is a net tangible benefit.
Make no mistake, we are entering a market of unchartered economic territory and when rates rise, they rise sharply and a knee-jerk reaction is felt across the board. Get qualified for that mortgage loan, send in all of your financials, order your appraisal and move forward with locking in your interest rate.
If you are still shopping for a mortgage rate, click here to compare mortgage rates Santa Rosa. You can give me a call Scott Sheldon at 707-217-4000 and learn why the Fed caused mortgage rates to move again.