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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Mortgage rates just fell and they could go even lower

Mortgage rates just fell and they could go even lower



Mortgage rates quickly fell after Fed's announcement Wednesday that it would come back in bond buying, the big time – which could take rates even lower.

9659003] The move in mortgage rates followed Fed Chairman Jerome Powell's announcement that the central bank would terminate the so-called settlement of bonds from the balance sheet faster than most expected, leading to the yield of the 10-year treasury, a change as someone expected. The Fed will buy more bonds faster, "writes Matthew Graham, chief executive of Mortgage News Daily." And bond purchases result in lower prices, all things being equal. "

Even small rate movements can have a major impact on k b of housing, especially since so many buyers today are facing overheated housing prices and therefore on the edge of being able to afford a home at all. Look at the 30-year fixed rate on a $ 300,000 mortgage, every 25 basis points move down means a $ 50 savings on a monthly payment. With the rate now down around 75 basis points from November, it is a $ 150 savings per month.

The drop in rates helps both potential buyers and current homeowners who might benefit from a refinancing – but it all comes with a warning. The Fed does not raise rates because the economy is weakening.

"While a plus for home buyers whose concerns about the economic outlook are shattering consumers and homebuyer confidence, it could offset t he benefits from lower mortgage rates," noted Danielle Hale, chief economist for realtor.com.


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