Interest rates have a powerful effect on our economy. People typically shop around for the highest interest rates before investing funds in a savings account, money market fund, bonds, or other types of interest-bearing investment accounts. Conversely, potential homebuyers seek out the mortgage lending institution that can offer them the lowest mortgage rate with the most favorable terms.
If you were to buy a house 10 years ago in October 2000, you would have been looking at an average 30-year fixed mortgage rate of 7.84%. Fast-forward to the present day mortgage news and you would be looking at an average mortgage rate of 4.32% for a 30-year fixed mortgage loan. That mortgage rate reduction is not only positive mortgage news for individuals looking to buy a home in the near future, it has also benefited many long-term home owners who were able to refinance their mortgages and enjoy lower monthly mortgage payments.
If you’re looking for mortgage news about the future of mortgage interest rates, the best agency to turn to is the Federal Reserve. Each month, the Fed Chairman issues a statement that keeps banks, brokerages, and other financial institutions alerted to what might happen to future interest rates.
At its September 2010, policy committee meeting, the Federal Reserve indicated that the pace of recovery in output and employment has slowed in recent months. As a result, the mortgage news was that the Fed’s perception of slow growth and low inflation in the U.S. economy removed any upward pressure on fixed mortgage rates for now.
Most economists do not expect interest rates to rise in the near future because of the negative impact it could have on the economic recovery and mortgage news projections show rates remaining at about the same levels as they currently are through 2011 .