The housing industry is experiencing mortgage rate volatility. After a string of weeks of lower mortgage rates, this recent week the fixed rate for a 30-year mortgage rose to 3.75%. That is 6 basis points above last week’s 3.68%. These percentages are still significantly lower than the 4.86% of last year. So, mortgage rates are still historically low right now. People looking to refinance still have an opportunity to find a good rate to save hundreds of dollars each month.
Why the shift in the mortgage rates? There is a lot of volatility happening in our financial markets.
The US-China trade war is one of the main reasons for the higher rates. There is uncertainty in the global marketplace of how this will turn out. The Federal Reserve meets this week and there is a big chance that they will lower the Fed Funds Rate for the third time in 2019. Economists are predicting that they will cut the rate by 25 basis points. We will know by Wednesday afternoon if the Fed Funds Rate was cut again.
As a reminder, even though the Fed Funds Rate may be cut down, mortgage rates do not automatically match up with that cut. We will have to give it a week to see if the global markets can settle down and react normally to a rate cut from the Federal Reserve.
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