Everyone is keeping a close watch at the next rate increase by the Federal Reserve. In a previous report, it was stated that the first rate increase in almost a decade was implemented by the Central Bank last December and many were concerned that the rate increase and the succeeding ones will affect mortgage rates. Several experts have already explained that mortgage rates can move on, with or without the federal rate hike, depending on many factors such as inflation and laws of supply and the demand. Despite that, many are still fearful that it will eventually have a negative effect on mortgage rates.
According to an article in Detroit Free Press, the mortgage rates are not expected to rise in the next couple of months. So far, mortgage rates are still at the attractive 4 percent range on a 30-year fixed term. Moreover, it also mentioned that the Federal Reserve has not raised the rates this January as previously feared by some. However, another rate hike is expected, though unlikely, to happen in by the end of the first quarter after the Fed's next 2-day meeting in March 15-16.
Again, as the publication reiterates, the Federal Reserve has officially announce that there will only be gradual increases in the funds rate. And it has been observe that surprisingly, rates have been going down in the last few weeks because of factors like China's slumping economy, plunging oil prices and stock prices. Experts believe the mortgage rates will not be skyrocketing by the end of the second quarters.
Also in a previous report, during their December meeting, Fed members have agreed to a gradual interest rate increase of not more than 25 base points (1 base point = 0.01 percent) or between 0.25 percent and 0.5 percent and that the gradual increases will depend on economic conditions, seeing inflation as one of the many concerns.
