An recent CBNC article by Diana Olnick paints an interesting picture the current state of the lending industry in the US. When the Fed raised the funds rate we all thought mortgage rates would naturally rise. The opposite is occurring. Here’s why:
The industry has been concerned about higher mortgage rates in 2016, but so far, rates have been low. And they may even head into record-low territory soon, according to analysts. About two months ago, the Federal Reserve raised its funds rate for the first time in years. Since then, however, the 30-year fixed-rate mortgage has been dropping. “Mortgage rates are going down again, and it’s good for borrowers, but is it really good for the housing market and the broader economy? The answer is no,” said Guy Cecala, CEO and publisher of Inside Mortgage Finance.