Big Market Week for Bay Area Mortgage Shoppers
Those in the Bay Area looking to buy or refinance their current mortgage should look no further than the present for signs; the present WEEK, that is. Some consequential reports and news are due out this week on the economy and the future of interest rates that would have a big potential impact on those shopping for a mortgage in this SF/Bay Area market.
The “Fed,” or the Federal Open Market Committee as they are referred to formally, is adjourning this Wednesday for its 2-day meeting. Experts say there is less than a 5% change of a rate hike, but people are more interested in what is said at the conclusion of the meeting, as investors look towards June to see what the chances of a hike are at that time. It is widely expected there will be a hike at that meeting, and they will also provide their outlook for the rest of the year with respect to hikes. In March, the Fed said they could see two or three rate hikes in 2017. This means that the rate would double in the span of 6 months, which is the same number of hikes in 6 months that there have been in the last 11 years combined.
As for the impact on mortgage rates here in the Bay? Home loan rates have been down nearly 30 basis points since the election “pop” that rates spike to multi-year highs. A correction has definitely occurred since that time, and the mortgage rate market appears to have risen too far, too fast. At the present time, its fair to say we are seeing the lowest rates of 2017, and rates are resting at this place for the time being. The Federal Reserve is in a tough spot, where it is trying to protect the economy from too much growth all at once. It is there to seek balance between growth and inflation. Rates rising too quickly can shake up the economy by causing job losses and put companies into freeze-mode. But it it doesn’t raise rates at an appropriate rate, it can lead to high inflation in the economy. So, as you can see here, its a tough spot to be in.
Mortgage hunters here at home are going to be watching the results of the meeting, as well as the upcoming jobs report on Friday, as well as additional commentary from Fed Chairwoman Janet Yellen. We will be watching closely, ourselves here, to update you on the impact for mortgages and their subsequent rates. Stay tuned……
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