When the Federal Reserve has finally increased interest rates after nearly a decade, many were concerned if this will have a big impact in mortgage rates. According to Forbes, the Federal Reserve will continue to raise interest rates in 2016. However, contrary to what many fears, the rise in interest rates reportedly will not automatically drive an increase in mortgage rate, especially for homebuyers. Moreover, it was stated that mortgage rates will or can move on their own, with or without the rate changes dictated by the Federal Reserve. Why? Because there are many factors affecting mortgage rates and the Fed's rate increase.
In a previous report, it was said that the expected rate increase should not cause home buyers to worry. According to John Wake, a real estate agent in Arizona has noted that people act on what they have expected so if homebuyers have expected rates to increase, they could make decisions based on that expectation even if rates do not increase.
So what is the update on Mortgage Rates now? According to The Washington Post, the government-backed corporation, Freddie Mac, has released data that shows the 30-year fixed-rate average decreased while the 15-year fixed-rate and five-year adjustable rate averages increased a little.
The finding were from a survey from with, Freddie Mac, sums rates from 125 across United States to arrive with national averages for the most popular mortgages. According to The Washington Post, the said survey was completed before China postponed trading on its stock market Thursday for the second time this week. Returns on U.S. Treasury saw the lowest levels in one moment as investors tuned to bonds. The return on 10-year Treasury notes dropped to 2.177 percent.
So unlike interest rates that may or may not affect mortgage rates, the changes with the 10-year Treasury bond is said to be one of the best indicators of movement of mortgage rates.
