Fed Hints Mortgage Rates May Soon Rise
Fed Hints Mortgage Rates May Soon Rise
Interest rates are expected to soon rise, even as the Federal Reserve announced on Wednesday that it would keep its benchmark rate near zero. The Fed, however, warned that it was preparing to taper its emergency stimulus efforts from the pandemic, including winding down its bond purchases. That is expected to make mortgage rates rise, as well as rates on credit card and car loans.
“Tapering itself is going to increase yields in the medium- and long-term horizons, which will translate into higher borrowing costs,” Yiming Ma, an assistant finance professor at Columbia University Business School, told CNBC.
The Fed has purchased $40 billion worth of mortgage-backed securities each month as part of the stimulus program during the pandemic. That has brought a surge of liquidity into the mortgage market. It has allowed lenders to drop interest rates.
Mortgage rates have been ultra-low for over a year. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 2.86% last week.
Long-term, fixed mortgage rates will move higher as soon as the Fed starts to slow the pace of bond purchases, Ma told CNBC.
“The moment the Fed starts pulling back, they will have an immediate effect,” George Ratiu, manager of economic research at realtor.com®, told MarketWatch. Even before the Fed does so, rates could rise. Mortgage rates follow long-term bond yields, like the 10-year Treasury note. Long-term bond yields began to rise after the Fed’s statement on Wednesday.
The National Association of REALTORS® has been predicting rates will rise over the next few months: They predict the 30-year fixed-rate mortgage to average 3.5% by mid-2022.
Source:
©National Association of REALTORS®
Reprinted with permission
admin
For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.
Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.
Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.
When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.
For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.
