On the same day the news comes that the Federal Reserve announced that it would hold interest rates steady at almost zero and indicated plans to keep them there for at least three more years. The Fed’s move to keep rates low has not sent the cost of borrowing everything from car mortgages to depths since the 1950s.
“Low interest rates are candy for stock market investors and the Fed just sets a whole bucket of goodies on the front porch,” says Bangkok’s chief financial analyst Greg McBride, CFA. “But savers and retirees have put their feet on the stomach when the Fed cut the void, and now the shin kicked in saying they would not be in a hurry to reduce inflation.”
Mortgage rates have not been set by the Fed. They track the 10-year Treasury rate, which has eradicated new lows this year as an epidemic wreaked havoc on the economy. The 10-year business today stands at 0.685 percent after starting at around 1.9 percent in 2020.
Meanwhile, Fannie Mae, a government-sponsored agency, said today that mortgage loan lending is expected to reach an all-time high of $ 3.9 trillion this year.
“We believe the low rate environment will support refinancing demand over the forecast horizon,” Fannie May said in a statement. The remaining amount has at least half a percent incentive to refinance. ”
Fannie’s rates do not include the points and some other fees that Bankrate has included in its survey.
Video: Mortgage demand as interest rates stall (CNBC)
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