Fed Increases The Fed Funds Rate & Mortgage Rates Drop!
Many think that because the Federal Reserve raised the Federal Funds rate by .25% yesterday that it means interest rates went up by .25%. That is not the case! Mortgage rates actually went down .125%.
Here is a great video from The National Real Estate Post with an interview with Barry Habib. Barry explains and shows the chart above that the 35 year rally in the 10 year bond bull market could continue. We follow these trends, the fundamentals, mortgage-backed securities, etc. to guide our clients to get them the best rate we can because it’s not what rate you are quoted but what rate you are locked in at.
No one can predict what rates will do as I say time and time again but we do know they are at historic lows right now. Every 1% increase in an interest rate reduces your buying power by 11%.