Current Mortgage Rates

Mortgage rates continued their flat streak this week following the Federal Reserve's decision to keep rates unchanged and adopt a more patient approach to monetary policy at its January meeting.  The Fed maintained the target range for the Federal Funds rate at 2.250% - 2.500% and stated that "the Committee will be patient" with respect to future rate increases.  In a post-meeting press conference Chairman Powell said that "the case for raising rates has weakened somewhat," offering further support for the Fed's more deliberate strategy.  The Fed also indicated that it may end its ongoing effort to reduce its balance sheet by selling its bond holdings sooner than expected, which could further reduce upward pressure on rates.

The Fed's decision to hold interest rates steady and assume a more neutral posture reflect continued low inflation and increasing concerns about slowing global economic growth.  When you combine these factors with international trade uncertainty and a lackluster housing market -- partially due to multiple rate increases over the past several years -- the Fed's position make sense.

Many mortgage industry experts interpret the Fed's collective words and actions as a sign that rate hikes are off the table, at least in the near term, which is positive for mortgage borrowers.  Although the Fed has not changed its forecast for two potential rate increases in 2019, the market is expecting no increases, although this week a Fed board member suggested a single rate hike could occur in both 2019 and 2010.  Only time will tell if the market's predictions are right but the Fed's new "wait-and-see" approach continues to have a positive effect on mortgage rates which were stable for the third week in a row.          

The interest rate for a 30 year fixed rate mortgage held at 4.125% while the rate for a 15 year fixed rate mortgage was steady 3.500%.  The interest rate on a 5/1 adjustable rate mortgage (ARM) remained at 3.625% as shorter term financing remains an attractive option if you are comfortable with the longer term risk.  FHA mortgage rates and VA mortgage rates were also flat at 3.750%, with both programs appealing to borrowers focused on low or no down payment programs, especially first-time home buyers.  Non-owner occupied mortgage rates stayed put at 4.500%.  Bucking the trend, jumbo mortgage rates dipped 0.125% to 4.000%, below conforming loan rates, as lenders court higher income borrowers.

After eight rate increases over four years, the January Fed meeting signals a significant shift in policy.  Instead of more almost-certain rate hikes, the Fed's newfound patience and more flexibility strategy enable it to tighten or loosen monetary policy (or remain in neutral) in response to changing economic conditions.  This is positive news for mortgage borrowers and a housing market that has been stymied by climbing rates.  

While interest rates are impossible to predict, prospective borrowers looking to buy a home or refinance should take advantage of rate dips and improved market stability.  Additionally, as lenders react differently to dynamic market conditions, we have also seen a wider variation in mortgage rate pricing, which means borrowers benefit more by shopping multiple lenders.

Because interest rates change constantly, we continue to actively monitor the market for new developments.  Borrowers should check the FREEandCLEAR rate tables regularly to review personalized, updated mortgage rates for lenders in their area.  Our rate tables are free to use and require no personal information.