Mortgage Rates Expected To Grow Along With The Economy

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The Federal Reserve released its December 14 meeting minutes Tuesday. There wasn't much there to disturb the mortgage markets. Thankfully.

A Window To The FOMC Braintrust

The "Fed Minutes" is an official recap of the most recent Federal Open Market Committee meeting. It's published 8 times annually -- exactly 3 weeks after the FOMC adjourns.

Fed Minutes is similar to meeting minutes released after a corporate conference or condo association gathering.

The minutes provide additional details about the conversation and debate that took place between meeting attendees.

For Wall Street and investors, the Fed Minutes are the lengthy companion to the Federal Reserve's brief, more well-known, post-meeting press release. Whereas the press release is measured in paragraphs, though, Fed Minutes are measured in pages.

10 pages, to be exact.

Inflation Risks Are Low; Same For Disinflation

Here is some of what the Fed discussed last month:

• On inflation : Core inflation levels "trend lower"; disinflation risks are low.
• On housing : The market is still "quite depressed"; demand is "very weak".
• On stimulus : The Fed will stick to its $600 billion support plan

In response, conforming mortgage rates in Cincinnati are unchanged today.

This no-change in rates is welcome news for  last-chance refinancers and other people getting a jump on the "Spring Buying Season". Mortgage rates have been trending higher since November, erasing 7 months of gains in 7 weeks. The 30-year fixed rate mortgage is rapidly approaching the psychologically-important 5 percent figure.

Freddie Mac reports the average 30-year fixed mortgage rate as 4.86%.

The Fed Signals To Buyers To Rate Lock

As compared to November, mortgage rates are higher. As compared to history, however, mortgage rates remain low. That likely won't stick. Not with the Federal Reserve expecting growth in the economy.

If economic contraction dropped mortgage rates, economic expansion will raise them.

If you are still floating a mortgage rate, or have otherwise yet to commit to a lender, your opportunities are ending, unfortunately. Once the economy moves to higher gear, local mortgage rates will be among the first of the casualties.

To get a live rate quote right this minute, call me at 513-443-2020 or.

(Blog post adapted from Bring the Blog, a blog content service for loan officers)