Mortgage Rates Unchanged - What will the Fed's do now?

Mortgage Rates were slightly higher today, but relatively unchanged as they are still better than what they were in late November.  4.5% still remains the most prevalently quoted conforming 30yr fixed rate for ideal scenarios.

Today's relative lack of change in the rate environment is partly a function of the empty event calendar. There was little to inspire bond markets (which ultimately affect mortgage rate sheets) in either direction.  What we have seen so far in 2014 with rates in the last six weeks may be running out of steam.  This leveling-off comes before the next important piece of information:  next week's FOMC (Fed’s) Announcement.

The Fed’s have announced that they will be reducing its asset purchases – the so-called tapering process.  Most economists thinks that this will continue, but after the slew of data that has come out ever since the weak Jobs Report nearly two weeks ago, there are more than a few people thinking that there could be some changes that the Feds might be back peddling a little bit.

If the Fed’s continue with their plans, then the rates are currently being looked at as the bottom of where the floor will be in the future.  However, if the Fed’s decide to change their stance, the roller coaster might continue and we might see some more improvements.  In general, further improvement would be tough to sell and likely to be more measured between now and the Fed announcement.

In summary, after a weaker opening, the rates markets have managed to claw their way back to positive territory. The benchmark 10year is holding right above the 2.80 mark.  For that to break, it will take some significant weak data to post.  Are we still on the roller coaster as I mentioned last week?  I do not know but I would still cautiously float in the very near future as rates could jump at any time.

If there is any financing issues you need, please give me a call at 314-744-7806, or visit me on my website by clicking on the link below:

Call The Money Man