Home >> Daily Dose >> Mortgage Rates Dip as All Eyes on Fed
Print This Post Print This Post

Mortgage Rates Dip as All Eyes on Fed

yellen_janet_rdax_161x201On Wednesday, the Federal Open Market Committee (FOMC) will hold its monthly meeting—and in anticipation NerdWallet reported that mortgage rates for both 30-year and 15-year fixed-rate loans, as well as 5/1 ARMS, dropped. While market watchers do not anticipate policy changes to come out of this month’s meeting, in light of last month’s interest rate hike it seems as if that is not enough to ebb the pre-meeting caution the market is experiencing.

According to NerdWallet, on Monday that the 30-year fixed mortgage rate is at 4.16 percent APR (-0.04), the 15-year is at 3.54 percent APR (-0.04) and the 5/1 ARM is at 3.82 percent APR (-0.01).

Michelle Girard, Managing Director and Chief Economist of NatWest Markets at the Royal Bank of Scotland, forecasts that while rates will most likely stay the same this week, this will probably not be the case for the rest of the year.

Barrons.com reported that Girard predicts four rate hikes in total this year into early next year. “We also look for the Fed to announce a change to its reinvestment policy in Q4, and to begin tapering purchases of both Treasurys and MBS in January 2018. By October 2018, we believe all reinvestment will be ended. Market participants look for fewer rate hikes in 2017 (and beyond), in part because they believe that changes in the Fed’s balance sheet may “substitute” for interest rate hikes. However, we expect the Fed to maintain its once-per-quarter hiking pace through 2018 even as reinvestment is ended,” said Girard.

At its last meeting, the Fed raised interest rates to a range of 0.75 percent to 1 percent. After the hike, Fed Chair Janet Yellen commented, “It is important for the public to understand that we're getting closer to reaching our objectives."

 

About Author: Rachel Williams

Rachel Williams attended Texas Christian University (TCU), where she graduated Magna Cum Laude with a dual Bachelor of Arts in English and History. Williams is a member of Phi Beta Kappa , widely recognized as the nation’s most prestigious honor society. Subsequent to graduating from TCU, Williams joined the Five Star Institute as an editorial intern, advancing to staff writer, associate editor and is currently the editor in chief and head of corporate communications. She has over a decade of editorial experience with a primary focus on the U.S. residential mortgage industry and financial markets. Williams resides in Dallas, Texas with her husband. She can be reached at Rachel.Williams@theMReport.com.
x

Check Also

Eye on the Industry: VP of Mortgage Bank Announced

More information is revealed on integrations and partnerships with software providers and risk management solutions.

GET THE NEWS YOU NEED, WHEN YOU NEED IT.

With daily content from MReport, you’ll never miss another important headline in originations, lending, or servicing. Subscribe to MDaily to begin receiving a complimentary daily email containing the top mortgage news and market information.