CONTACT ME
Mortgage Rates on Edge Ahead of Fed

Mortgage rates held steady today, on average, despite moderate improvements in underlying bond markets.  Typically, bond market improvement results in comparable improvement for mortgage rates.  The groundholding is the latest evidence of massive anxiety on the part of lenders ahead of tomorrow's big Fed announcement.  Lenders don't want to be on the hook for low rates if the Fed happens to send rates screaming higher tomorrow.

To reiterate yesterday's point, we already know the Fed will hike.  Markets are also expecting the Fed to accelerate its forecasts for future rate hikes (this is what pushed rates higher in December, by the way--not the rate hike itself).  Unfortunately, we can't pinpoint exactly how well-prepared markets are for such an acceleration.  

We won't know if the Fed's actual forecasts are faster or slower than expected until we see how markets react tomorrow at 2pm ET.  If the Fed accelerates less than expected, there is still a chance for mortgage rates to hold the line at the current ceiling (4.375% for top tier 30yr fixed scenarios for the average lender).  If forecasts outpace expectations, rates could move higher quickly.  

This Daily Mortgage Rate Update is provided in partnership with Mortgage News Daily.