![]() While that’s nowhere close to the sub-6% rates many prospective buyers were hoping for, even a difference of a few tenths of a percentage point up or down can add - or subtract - tens of thousands of dollars over the life of your loan. Fannie Mae predicts the average rate for a 30-year fixed mortgage will drift down to 6.6% by the end of year. In any case, though experts don’t predict the Fed will actually cut rates before the end of 2023, there may still be room for optimism.Ĭooling inflation should help mortgage rates stabilize and even decline a bit as the year progresses. The central bank has certainly left the door open to carrying out a 12th rate hike, but the jury is still out. ![]() ![]() The most recent Consumer Price Index shows annual inflation was at 3% for the 12-month period ending in June, down significantly from its peak at 9.1% last summer, but not yet at the Fed’s annual target rate of 2%. Since last spring, the central bank has been raising interest rates in an attempt to rein in inflation - and it appears to be working. Here’s what you need to know about mortgage rates, how they work and how to find the best deal. Regardless of whether another rate hike is on the horizon, it’s always important to compare offers from different lenders to find the lowest mortgage rates and most amenable loan terms. The bigger impact would come from the Fed’s broader outlook and the possibility of future rate hikes going into the fall. ![]() Before the Fed’s last meeting, Darren Tooley, senior loan officer at Cornerstone Financial Services, predicted that the 25-basis point increase wouldn’t have a dramatic immediate effect on mortgage rates. So where do mortgage rates go from here? Experts predict mortgage rates will continue to fluctuate, but that there won’t be any significant upward or downward movement. Mortgage rates, which are influenced by a variety of economic factors, such as inflation, policy changes by the Fed and employment data, have roughly doubled since the start of 2022. Elevated mortgage rates are making it more difficult for prospective homebuyers to afford to purchase a house.Īt its July meeting, the Federal Reserve increased the federal funds rate - a short-term interest rate that determines what banks charge each other to borrow money - by a quarter of a percent, marking the 11th time the central bank has hiked rates since March 2022. ![]()
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