In light of the Federal Reserve’s decision to not raise the Federal funds rate, mortgage rates for a 30 year fixed rate mortgage fell to 3.86 percent this week.
The Federal Reserve continued to hold off on raising their interest rates, choosing to keep rates close to zero percent. The Fed attributed their lack of action to the lack of global growth that could potentially slow the domestic economy as well as the fact that inflation in the US remains subdued. The Fed committee also wanted to see additional evidence from the labor market to make sure it has and continues to improve.
The Fed made their decision 9-1 but they will meet again in late October and mid December. During those meetings, the Fed will once again decide on whether to raise rates. The Fed still plans on raising interest rates by the end of the year, but they have also said this for several previous years.
Currently, the Federal Reserve’s long-term goal is to have rates at or close to 3.5% by 2018.
Home buyers looking for a home loan will love the news that the Federal Reserve has not raised their rates as of yet. Mortgage rates are directly affected by the Federal Reserve rates and rise accordingly. Rates have stayed below 4% for 9 straight weeks. So long as the Fed does not raise rates, great financing opportunities still exist for buyers that might not be seen for some time. Having the Fed raise rates shows their confidence in overall economy, but from an individual buyer’s perspective, now is the time to lock in a great rate for the next 15 or 30 years.