Federal Reserve members recently met for a regularly scheduled Federal Open Market Committee (FOMC) meeting where the short-term Fed Funds Rate remained near zero percent but that was not the topic that the investing community and housing markets were watching and listening to.
The main event was when the Fed may begin to scale back or taper its massive asset purchase program which began at the outset of the pandemic shutdowns in March of 2020. The program was designed to support the flow of credit to households and businesses and to stabilize the mortgage bond market.
Fast-forward to the current time and we now have a stabilizing economy, and the labor market has improved. Inflation has risen but the Fed says it will be transitory. At the FOMC meeting in September, Fed Chair Powell signaled that at the November meeting, to make a taper announcement, the Fed will likely need to see more progress on the labor market.
Other unknowns which may impact a taper announcement include the debt ceiling negotiations, infrastructure debate, and signs of Chinese property bubbles losing air. If the Fed wants to taper, and it may come as soon as November. This means it is very difficult for mortgage rates to improve much if at all from here. For the foreseeable future, home loan rates will most likely remain near current levels to slightly higher, but it all depends on what the economy does and how the Fed reacts.
Bottom line: Mortgage rates are still low, but they probably won’t last forever. So, if you or someone you know is considering a refinance or purchase, now is the time.
Source: Mortgage Market Guide
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
