Releases Mortgage Rates Update - What the Fed Announcement Means for Mortgage Rates

Share Article releases latest weekly analysis of mortgage rates focusing on the big Fed announcement made yesterday and what it means for the future of mortgage interest rates in the near future and well beyond.

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Unless there is a substantial strengthening of the economy in the near term, it's a pretty good guess we will be keeping rates low for some time. - Fed Chairman Ben Bernanke

The weekly mortgage rate report found that mortgage interest rates have inched upward since last week, however the Fed is aiming at keeping it from rising too much. As we predicted last week the Fed is determined to keep interest rates in check in an effort to keep real estate and the overall U.S. economy on its path to recovery.

Current interest rates are:

         4.25% - average rate for a 30-year fixed rate mortgage
         3.45% - average rate for a 15-year fixed rate mortgage

Here's what is reporting as the need to know info about the Fed's unprecedented announcement yesterday and the effects it's already having.

  •     The Fed stated it wouldn't increase the benchmark interest rate until late 2014.
  •     The key rate has been kept at a record low near 0% for the last three years.
  •     The Fed is making the decision based on the slow economic recovery and signs that inflation will remain low.
  •     The timeline of late 2014 is a 'best guess' not a hard timeframe, depending on how the economy fares over the next few years.
  •     The Fed believes the economy will grow by 2.2-2.7%, that unemployment will drop to 8.2% and inflation will be at only 2% this year.
  •     The Fed also said that they are holding off on further bond buying, but that depending on the economy they may resume doing so in the future.
  •     The Fed actions were approved by members 9-1.
  •     After the announcement Treasury yields fell which indicates that mortgage rates will hold or decrease.
  •     Stocks saw positive gains after the announcement, recovering losses that were experienced earlier in the day. is forecasting that there will be a tug of war over interest rates in the weeks and month to come. As the U.S. economy improves and people gain confidence in it, it's typical for interest rates to rise. However, the Fed is taking steps to try and counteract that from happening, no doubt because they know the lure of low interest rates will be a big factor in getting more buyers into real estate markets across the country.

To find more information on mortgage rates, new home listings and the home buying guide for today's buyer, please visit:

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