August 22, 2016
Mortgage loan interest rates were up and down last week, closing on Friday slightly higher ahead of a week that could have major impact on interest rates depending on what Fed Chair Janet Yellin says during a conference in Wyoming. Anytime the Fed or its chairperson has something to say about the possibility or timing of another interest rate hike, we see great potential for volatility in mortgage loan interest rates.
That’s due to investor reaction to the statements, as mortgage loan interest isn’t directly tied to events like these. The Wall Street Journal has something to say about this week’s event which may shed a bit of light on why so much attention is paid recently to the Fed and interest rate policy:
“The proverbial ‘all eyes’ are turning toward Wyoming, and next weeks annual econ-geek party hosted by the Kansas City Fed. They certainly wont be disappointed by the majestic mountain range, but they may be disappointed if theyre expecting a big clue about the next rate hike.
The highlights of the Jackson Hole Symposium will be a speech on Friday from Federal Reserve Chairwoman Janet Yellen. Fed speakers have been all over the map lately, leaving traders and investors thoroughly confused about the path of interest rates. Some have been hawkish, some dovish, and miraculously one even managed to be a bit of both.”
As you can see from the above, the uncertainty plays no small part in contributing toward potential volatility. Investor reaction to the symposium speech will naturally depend on the contents of that speech, so it’s going to be an interesting week for rates.
At the time of this writing, 30-year fixed rate conventional mortgages are reported in a range of best execution rates between 3.375% and 3.5%. FHA mortgage loan rates are reported in a range between 3.0% and 3.25% best execution depending on the lender. All rates quoted here are “best execution” and are not available from all lenders or to all borrowers. Your financial qualifications will play a large part in determining your access to these rates.
Locking or floating this week could be tricky. If you aren’t sure what to do about your mortgage loan interest rate lock commitment (assuming you haven’t got one already) this is a very good week to get the advice of your loan officer before choosing to float. Floating (holding off on a mortgage rate lock commitment with the lender in hopes that rates will go down) is never without a degree of risk but that risk is elevated this week.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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