Economic conditions are slowly returning to normal across the nation and many experts are speculating that the Federal Reserve may soon raise interest rates. In recent years, the Fed has attempted to promote economic growth by holding the Fed Funds Rate near 0.00% which has allowed businesses and consumers to borrow money cheaply. However, strong labor market reports, increased household spending, and a busy real estate season have all contributed to industry insiders believing that the 12-person Federal Open Market Committee may hike up interest rates . While the Fed does not (and cannot) set mortgage rates, their decisions about interest rates can greatly affect the mortgage industry. The Fed meets eight times annually, and their next scheduled meeting is in September.
What other factors affect mortgage rates? Aside from simple supply and demand, the world’s economy can also impact your interest rate. Most notably, the recent instability in Greece and China have kept rates low as foreign investors seek financial security in the United States.
Be sure to check EveryHome.com regularly for the latest mortgage and real estate updates.