The week of January 27, 2019, the Federal Reserve had its 2-day rate-setting meeting and decided not to raise interest rates. Although the Fed does not directly affect long-term mortgage rates, this is a positive outcome for borrowers looking to purchase a new home or refinance to a lower fixed rate.
Mortgage interest rates have been slowly declining over the last few months which is a good sign for buyers. The 30-year fixed-rate mortgage average was 4.45%, having stayed at that level for three straight weeks, and the Fed’s choice to leave interest rates unchanged could keep mortgage rates steady.* Lower interest rates could mean lower monthly down payments for home buyers, and less total interest spent over the life of the loan.
The Federal Open Market Committee (FOMC), which decides the Fed’s rate policy, said in its statement, “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.” **
It is hard to predict what will happen in the upcoming months, but for now, things are looking bright for homebuyers. Please reach out to any of our Loan Officers if you have any questions, we are always here to help.
*Passy, J. (January 31, 2019) So the Fed left interest rates unchanged, but what does that mean for you? https://www.marketwatch.com/story/5-things-consumers-should-watch-for-now-that-the-fed-has-not-raised-rates-2019-01-30
**Foster, S (January 30, 2019) A ‘patient’ Federal Reserve signals it’s done raising interest rates — for now. https://www.bankrate.com/banking/federal-reserve/fomc-recap/