You may have heard the news over the weekend that the Federal Reserve dropped the Fed Funds Rates to zero. Many of our current and past clients have been confused by this, thinking that mortgage rates hit zero percent as well.
The Federal Reserve announced on March 15th, 2020 a stimulus package to help level the economy due to the spread of the coronavirus affecting the economy, stock market, and creating a volatile mortgage market.
It’s very important to note and remember that the Fed Fund Rate is NOT mortgage rates. Over the coming weeks this announcement may help drop mortgage rates back down from their recent highs – however this doesn’t mean that mortgage rates have dropped.
Since the Feds only have a handful of meetings every year, this emergency action was an adjustment to catch up to the corona virus aftermath. Mortgage backed securities ultimately determine what mortgage rates are, which get adjusted multiple times per day – meaning pricing has already been adjusted based on current market conditions.
So Is Now Still a Good Time To Purchase or Refinance?
Yes. Interest rates are “higher” than we have seen in recent weeks, but even so they are still very low, historically speaking. You may have seen heard or seen some misleading rates or advice on social media recently that aren’t actually availible by any banks or lenders.
We do expect rates to drop again here in the near future. With that being said, we recommend that you speak with your loan officer and get prepared! Complete your application and get ALL of your required docs submitted so when rates do drop we can lock you in.
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