March 14, 2017
Since our last report, mortgage rates have pushed significantly higher. Industry professionals are watching the Fed very carefully at the moment as it’s expected that the Fed will hike interest rates soon. Any indication of that hike, the timing of the hike, or its’ severity is sure to send investors scrambling in one direction or the other.
A hike in rates is a sign that the Fed has more confidence in the economy, but as we’ve mentioned here before, what is good for the economy is often bad news for mortgage loan interest rates.
We are likely to see markets react in anticipation or out of a certain set of expectations rather than the actual reality of the situation. This sort of thing has happened before, when the Fed began discussing the end of “quantitative easing” or QE for short a few years back.
Investors did some typically knee-jerk reactions to any hint of the Fed’s ending their investments in securities…and we’re likely to experience some deja vu with this latest round of rate hikes regardless of the timing (both of the announcement and the actual hike itself).
Some sources report that a rate hike announcement is fully anticipated this week, but that does not guarantee a Fed announcement of same during or after its’ two-day meeting this week (March 14-15). “Wait and see” is the mantra for those trying to figure out which way things will go, rate-wise.
That is the environment home loan borrowers find themselves in over the short term, so the choice to “lock or float”, committing to a mortgage rate lock or holding off on that commitment hoping rates will move lower in the meantime, is fairly treacherous over the short term. You’re not likely to find many encouraging borrowers to “float” this week, at least not until after the Fed’s meeting.
30-year fixed rate conventional mortgages are in a new range between 4.375% at the low end and 4.5% at the upper end, best execution. FHA mortgage loan interest rates are, at the time of this writing, reported between 4.0% and 4.25%.
As always, the rates listed here are “best execution” rates, and are not available to all borrowers or from all lenders. Your financial qualifications and credit history will play an important role in determining your access to rates like these, and your experience may vary.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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