Home Mortgage Rates Remain Low
The cost of buying a new home remains historically low as the Federal Reserve Board continues to defer action on raising key lending rates. The average interest rate on a typical 30 year fixed rate mortgage is about 3.9% right now. It is no longer a question of if, but when will the Fed take action to raise interest rates for the first time since 2008 when rates were slashed to 0%. Most experts predict that when the Fed finally takes action it will do so only incrementally and raise rates to .25% and then only as a symbolic move.
Will there be any effect then on mortgage rates when the Fed takes this expected action? Most industry analysts don’t expect that mortgage rates will increase basis point to basis points to the Fed rate increase. Other factors such as high inflation or high unemployment rates would cause a higher increase in mortgage rates but if those factors are adversely affecting the economy, the Fed is not likely to tinker with interest rates.
So for the foreseeable future we can expect mortgage rates to remain low, regardless of any action or inaction on by the Federal Reserve Board. Borrow now.