Mortgage rates fell this week for the first time in over two months.
Freddie Mac reports that the 30-year fixed-rate mortgage fell to 3.76% this week from 3.89% last week with an 0.8 point. This comes as relief for buyers who are in the search for a home.
There is talk that this could change though.
Hawkish comments from the Federal Reserve’s Mester while Fed Chair Powell says prepared to raise rates by more than 25bp in the March meeting or future meetings if inflation doesn’t come down pushes stocks into negative territory. Powell has said that with the Fed Funds Rate going up, there will begin a cooling down period off housing demand.
Dovish Fed member Evans was in panic mode by the inflation spiral yesterday and said, “If we see inflation persisting at high levels longer than expected, if we have to raise rates more over time, then we will.”
Fed Chair Powell has reiterated the Fed’s position to shrink the balance sheet, which means essentially selling Mortgage-Backed Securities in the future. For the Fed, to be able to reduce the balance sheet, the economy and financial markets will have to absorb some rate hikes. We do not think the Fed will be able to be as aggressive as the economy has already slowed down a bit and financial conditions have already tightened.
These are volatile times but that means that there’s opportunity for those looking to make investment decisions. Contact us today and let’s discuss how to combat these times: kthayer@rfmoc.com
