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The Federal Reserve Meeting & Mortgage Rates Reactions

By Dan Green

The Federal Reserve votes on whether to raise the Fed Funds Rate; Today’s live mortgage rates and the 5-day trend; NAR reports on contracts for home sales.

Mortgage Rates After The Federal Reserve Meeting

Fed Funds Rate vs. Mortgage Rates - Growella
Fed Funds Rate vs. Mortgage Rates

The Federal Reserve adjourns from a 2-day meeting today and mortgage rates are expected to move.

Eight times annually, the Federal Reserve’s Federal Open Market Committee (FOMC) meets to discuss the current U.S. economic climate, and whether the group should change its monetary policies to guide the economy ahead.

The Fed’s most-used monetary tool is the Fed Funds Rate, an prescribed overnight borrowing rate between banks.

The Fed Funds Rate doesn’t affect home buyers directly, but changes to the benchmark figure ripple throughout the housing market.

When the Fed votes to lower the Fed Funds Rate, its goals is to speed economic growth and boost inflation rates. And, when the group votes to raise the Fed Funds Rate, its goal is to slow economic growth and reduce inflationary pressures.

Inflation rates and mortgage rates often move in a similar direction, so the Fed’s actions change mortgage rates indirectly.

The Fed’s words affect mortgage rates, too, and this is today’s risk to buyers and refinancing households because the Fed is expected to vote “no change” to the Fed Funds Rate.

When the FOMC adjourns from its 2-day meetings, the group releases a statement in which it identifies strengths and weaknesses in the economy, and present-day threats.

Inflation is mentioned always.

If the FOMC statement suggests that inflation rates are rising more quickly than expected, consumer should expect mortgage rates to rise as well.

Whenever the Federal Reserve meets, mortgage rates can be erratic.

Protect yourself from rising mortgage rates by shopping and locking prior to the Fed’s 2 PM ET adjournment.

Click here to get a rate quote now.

Today’s Mortgage Rates & Interest Rate Trends

Current Mortgage Rates for August 01, 2018 - Growella
Current Mortgage Rates for August 01, 2018

Current mortgage rates are rising.

As compared to earlier in the week, 30-year fixed-rate mortgage rates, 15-year fixed-rate mortgage rates, and 5-year adjustable-rate mortgage rates are higher.

Interest rates are higher for other fixed and adjustable-rate mortgage products as well. Conventional mortgage rates are climbing more quickly than rates for FHA loans, VA loans, and USDA loan.

Today’s mortgage rates changes:

Mortgage rates change multiple times per day and rate quotes are personalized, derived from more than a dozen factors including your loan size, your credit score, and the state in which your home is located.

Rates also vary between lenders based on the date and the time. The cheapest mortgage lender as of right now might not offer the lowest available mortgage rate a few hours from now.

Get actual rate quotes from actual lenders and comparison shop your choices. Find your preferred combination of rates, fees, and service.

Get Today’s Mortgage Rates

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More Homes Go Into Contract In June

Pending Home Sales Index, June 2018 - Growella
Pending Home Sales Index, June 2018

The Pending Home Sales Index reached a three-month high in June.

According the National Association of REALTORS®, buyers and sellers June went into contract at the fastest clip since March, reversing a two-month slide.

The trade group’s Pending Home Sales Index, which counts homes under contract to sell and not yet sold, rose one percent to close out the second quarter, posting an historically-high reading of 106.9.

Values over 100 are considered “strong” because the index is normalized against the 2001 housing market, the year in which the Pending Home Sales Index launched and a year characterized by healthy sales figures.

A Pending Home Sales Index reading above the benchmark value suggests a housing market that’s stronger than index’s inaugural year’s market.

The index has been above 100 since May 2014, consecutively.

For buyers of homes, the most recent Pending Home Sales Index suggests that the early-spring slowdown in housing may be temporary; and, that home sales will increase through late-summer and into fall.

Already, homebuilders are reporting an uptick in buyer activity and rising mortgage rates don’t appear to affect today’s demand for homes.

More than half of all homes are selling in fewer than 30 days.

For today’s home buyers, the best chance for finding the best house at the best price may be with the homes you find today. Talk with a local real estate agent and see what’s up for sale.

Written by Dan Green

Dan Green is a mortgage lending expert and the founder of Growella. Prior to Growella, Dan was a six-time, top-producing loan officer; and, ranked repeatedly among the top 1% of loan officers nationwide. Dan's home buying expertise has been in print and on TV with The Wall Street Journal, NPR, Forbes, CNBC, and others.

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