Mortgage Rate Trend Index Down: Sept. 21, 2016

Will rates go up, down or remain unchanged?

  • Michael Becker

    Michael Becker

    Branch manager, Sierra Pacific Mortgage, White Marsh, Maryland

    Despite 3 dissenting votes, the Fed voted today to keep rates unchanged. This should make markets happy for now, as the odds of a rate hike at this meeting were very low. More importantly, the Fed lowered its economic outlook for the remainder of the year. This should support lower Treasury yields and mortgage rates in the coming week. But be cautious: If Fed officials start giving speeches about future rate hikes, we could see a spike in mortgage rates.

  • Shaun Guerrero

    Shaun Guerrero

    Branch manager, Alterra Home Loans, Silverdale, Washington

    When it comes to Fed Day, to quote Forrest Gump, it's "like a box of chocolates. You never know what you're gonna get." And how true that is. On multiple levels, the Fed comments cause a ripple effect, from the stock market to what your strategy should be concerning rates. At this point, they have decided to leave rates unchanged at this time. Look for a rate hike in December, though. Rate hikes tend to cause an improvement in bonds. Therefore, a long-term strategy would lean toward rates improving, so I recommend floating your rate at this time.

  • Holden Lewis

    Holden Lewis

    Mortgage reporter,

    The Federal Reserve is getting the markets ready for an increase in the overnight rate this year, probably in December. But the central bank will continue to buy mortgage-backed securities after that. So, the Fed is keeping a lid on mortgage rates, while getting ready to turn down the heat on the economy. I think mortgage rates will dip, but briefly. They will rise by year's end.

  • Greg McBride, CFA

    Greg McBride, CFA

    Senior vice president and chief financial analyst,

    The Fed didn't raise rates, and despite sending a strong signal that a rate hike is coming, they don't expect core inflation to hit 2% until 2018. All this is good news for long-term bonds, and by extension, mortgage rates.

  • Brett Sinnott

    Brett Sinnott

    Vice president of capital markets, CMG Financial, San Ramon, California

    Mixed and sometimes even positive economic news has now turned negative, and the chances of the Fed increasing rates this month or even this year have dropped significantly. The market has most of this built in so it is not expected that rates will move significantly unless the Fed unveils "surprise" language in the meeting notes. Japan and the U.K. are taking serious measures towards expanding quantitative easing policies, which is leading many to believe the Fed will explore similar options as the global economy continues to slow. Housing markets remain elevated in several key areas which has homebuilder sentiment to its highest level of the year. This was helped by a reported shortage of existing homes. This, of course, leaves borrowers in a tough situation as home prices continue to rise, while rates have remained stagnant for the past few weeks.


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