Mortgage rates were quiet this week as investors anxiously await the Federal Reserve's next move, while lenders watch fewer borrowers walk through their doors.
If the Fed sticks to the plan next week and announces a reduction in the bond-purchase program, rates could jump significantly, mortgage professionals say.
Here is recap of what the Fed has done so far:
The Federal Open Market Committee is scheduled to meet Tuesday and Wednesday, when Fed Chairman Ben Bernanke holds a news conference. It was during one of these conferences, last spring, that Bernanke spooked investors with talks of trimming the $85 billion-per-month stimulus program this year, which led to an immediate spike in rates.
It's possible the Fed will delay the inevitable because the latest monthly employment report, which the Fed watches closely, was weaker than expected.
The Fed probably won't take any major action next week, but that doesn't mean rates won't rise again soon, says Bob Walters, chief economist.
"We have seen a trend toward higher rates, and we have to respect that trend," Walters says. Regardless of whether the Fed announces the tapering of the bond-buying program next week or not, it will happen at some point, he says. Until the rising trend breaks for a sustainable amount of time, locking your rate is the only option.
For more information contact:
Wesley S. Tower
Senior Mortgage Advisor, NMLS # 176635
PHH/ Coldwell Banker Home Loans
Office: 410-919-1897lMobile: 410-991-9188lFax: 856-917-1358