The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. “However, the federal funds rate is expected to remain elevated through the end of the year, meaning that a higher interest rate environment is here to stay for the time being, including for home loans.” “Depending on the extent of the impact of a tighter banking sector, Powell expressed a ‘wait-and-see’ approach to further contractionary policy,” Jones said. Fed Chair Jerome Powell said recent banking sector instability is likely to lead to tighter lending requirements, which could serve to cool inflation. The Fed emphasized a commitment to cooling inflation to its 2% target, but pulled back its stance on additional rate increases. (Photo by OLIVIER DOULIERY / AFP) (Photo by OLIVIER DOULIERY/AFP via Getty Images) Olivier Douliery/AFP/Getty Imagesįive big takeaways from the Fed's extraordinary meeting Powell said that "depositors' savings in the banking system are safe" and the central bank will work to prevent episodes like recent turmoil from happening again. But rates fell on Wednesday on news from the Fed that its series of aggressive rate hikes could be coming to an end.įederal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, DC, on March 22, 2023. Yields on 10-year US Treasury bonds climbed on Tuesday ahead of the meeting as investors prepared for the impact of the committee’s revised rate projections, said Hannah Jones, economic data analyst at. The Federal Reserve raised interest rates by a quarter point in an effort to continue to fight stubbornly high inflation while taking into account recent risks to financial stability. Robust economic data suggested the Federal Reserve was not done in its battle to cool the US economy and would likely continue hiking its benchmark lending rate. However, they started climbing again in February. The survey includes only borrowers who put 20% down and have excellent credit.Īfter hitting a 2022 high of 7.08% in November, rates had been trending down. The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. “If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season,” he said. That’s good news for homebuyers who are seeing rates retreat slightly and home prices stabilize. “Mortgage rates continued to slide down as financial market concerns came to the fore over the last two weeks,” said Sam Khater, Freddie Mac’s chief economist. A year ago, the 30-year fixed-rate was 4.42%. The 30-year fixed-rate mortgage averaged 6.42% in the week ending March 23, down from 6.60% the week before, according to data from Freddie Mac released Thursday. Mortgage rates dropped again this week for the second week in a row amid lingering concerns about bank failures and uncertainty in the financial markets.
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