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
Austin, TX (PRWEB) January 26, 2012
The Homes.org 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 Homes.org 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.
Homes.org 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.
Homes.org is a fast growing real estate search portal that offers users much more than MLS listings. Homes.org gives users access to a rich collection of resources, including but not limited to, real estate listings, home owner finance tools and home service tools. Homes.org brings buyers, sellers and renters important information about the current markets and intelligent tools by partnering with real estate professionals from around the country. Homes.org is a subsidiary of Star Nine Ventures, Inc. headquartered in Austin, TX.
About Star Nine Ventures®
Star Nine Ventures® is an Austin-based, marketing-driven venture creation company targeting a wide range of national business-to-consumer online marketplaces. Star Nine's core mission is to build businesses that provide exemplary consumer experiences and unparalleled customer service.