Mortgage rates are on the rise for the third week according to Redfin editor Lorraine Woellert. The average rate for a 30-year, fixed-rate home loan was 3.73%, an increase from 3.68% last week.
But the Federal Reserve reacted with mixed reviews on the state of the U.S. and global economies and had different reactions about raising benchmark rates. They announced they would not raise their own benchmark short-term borrowing rate, and borrowing costs will probably stay low for a while. Woellert writes:
A Fed rate hike is typically a vote of confidence in the economy. Generally when the economy is healthy, mortgages cost more. But after the Fed acted last year, global financial markets hit the skids. Investors sought shelter in U.S. bonds, pushing interest rates and the cost of home loans down.
“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,” the Fed's Janet Yellen told reporters yesterday. “The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”