Low rates diving in for the long stretch?

The Feds have decided to keep the record low rate of interest — keeping the interest on home loans at an all-time low.

The national bank slice the rate to that ultra-low level a month back as the reality of the coronavirus crisis was getting clear. 

Things aren't beating that, Fed policymakers said in their declaration on Wednesday. 

"The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term," the Fed said.

"This may sound dramatic, but think about the economic damage currently taking place," Brachman says. "In one month, we have seen all the jobs created within the last decade be lost. The longer that this shock goes on, the damage gets exponentially worse.

The Fed's government supports rate doesn't have a nearby association with the drawn out rates on home credits, similar to 30-year fixed home loan rates. Truth be told, there have been times when the Fed has moved one way and fixed home loan rates have gone in the other. 

Be that as it may, during these seasons of COVID-19 turmoil, the national bank's record-low rates have been in a roundabout way adding to huge decreases in contract rates. Hours before the Fed gave its announcement, the Mortgage Bankers Association said rates on home credits hit another record-breaking low in its week after week review.

Mortgage rates could go down a bit more — but don't hold your breath waiting to see 0% home loans, says Brachman.


"Mortgage Interest rates are extremely low, they are not going to go much lower in the short term," he says. "If interest rates continue to stay at these low levels for several years, then mortgage rates will likely drift a little lower."

Home loan rates are erratic, so never attempt to "time the market" and hang tight for far and away superior rates to go along. In case you're hoping to purchase a home or renegotiate and detect an extraordinary rate that would function admirably for you, attempt to bolt it so you won't miss out.

Source:MoneyWise by Doug Whiteman

Guillermo "Bill" Sanjurjo Realtor® https://guillermorealtor.c21.com/ 12955 SW 42 St Suite 2, Miami, FL 33175 Cell: 786-232-1400