The move in mortgage rates followed Fed Chairman Jerome Powell's announcement that the central bank would end the so-called run-off of bonds from its balance sheet sooner than most expected. That caused the yield on the 10-year Treasury to tumble.
Mortgage rates fell quickly after the Fed's announcement Wednesday that it would be getting back into the bond-buying business, big time – which could take rates even lower.
div > div.group > p:first-child"> The average rate on the popular 30-year fixed, which had been sitting for days at 4.40 percent, fell sharply to 4.34 percent, according to Mortgage News Daily. That is the lowest in over a year and 19 basis points lower than a year ago. The rate had surged to over 5 percent at the start of November, which caused home sales to fall sharply in December and January."This is about as big of a change as anyone expected.
Even small rate moves can have a big impact on home buying, especially since so many buyers today are facing overheated home prices and are therefore on the edge of being able to afford a home at all. Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment. With the rate now down about 75 basis points from November, that's a savings of $150 per month.
The drop in rates helps both potential buyers and current homeowners who might be able to benefit from a refinance — but it all comes with a caveat. The Fed isn't raising rates because the economy is weakening. "While a plus for home buyers, if concerns about the economic outlook rattle consumer and homebuyer confidence, it could offset the benefit of lower mortgage rates," noted Danielle Hale, chief economist for realtor.com.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Mortgage rates skid to lowest level in a yearMortgage rates skidded last week to the lowest level in a year.
Read more »
Homebuilder sentiment holds steady despite a decline in mortgage ratesMortgage rates rose throughout most of last year but have since fallen to below year-ago levels. That should help make all homes more affordable.
Read more »
U.S. mortgage requests hit two-month peak as loan rates fallU.S. mortgage applications for buying or refinancing a home climbed to a two-mon...
Read more »
Stocks move lower in morning trading as investors await Fed’s interest-rate decisionU.S. stocks edged lower in early trading on Wall Street on Wednesday ahead of the latest interest rate policy decision by the Federal Reserve.
Read more »
US Treasury yields tick lower ahead of Fed rate decisionU.S. government debt prices ticked higher as investors await a policy decision by the U.S. Federal Reserve.
Read more »
Dow futures point to a lower open after Fed signals no rate hike this yearU.S. stock index futures were lower on Thursday morning, as investors are still digesting the Fed's latest comments.
Read more »
US Treasury yields move lower as Fed holds ratesU.S. government debt prices were higher on Monday, as investors digested news from a Federal Reserve meeting and awaited jobless data.
Read more »
Even now, Trump can't let go of his contempt for McCain.MaddowBlog: Even now, Pres. Trump can’t let go of his contempt for the late Sen. McCain.
Read more »
Mnuchin says his tax rate went up in wake of GOP tax lawTreasury Secretary Steven Mnuchin said his taxes went up in the wake of the Republican tax rewrite thanks to its cap on state and local tax deductions
Read more »