January 25th Market Update: What to make of the Federal Reserve's statement

Good afternoon,

The market has been unusually volatile this past week, seeing interest rates getting up above 4% as of yesterday and then the Federal Reserve released their statement on key interest rates. Here’s the nitty gritty: They have stated that they are looking to keep the key interest rate low through 2014 even though they are seeing mild economic improvement. This lead investors quickly into long term investments which ends up being very good for mortgage backed securities.

Good for Mortgage Backed Securities = Good for Mortgage Interest Rates.

With items like this statement it's important to remember that yes, they can be very good for interest rates in times like these but that it is also a one time gut reaction from the market which could just as easily reverse tomorrow. This statement doesn't change the market or the economy, just investors current opinion on where to put their money.

Have a great week!

Rates: 30 year fixed at 3.625% and the 15 year at 3.00%, FHA: 3.625%: As always rates change with individual credit scenarios and programs, with credit in the mid 700s and a 20% down payment these rates are what you should be seeing.

Matt

Matt Royer
Mortgage Consultant, CMC | Homes Mortgage
NMLS# 366970

612-232-7646 c
651-770-0637 o
651-294-1001 f

www.MattRoyer.com
mroyer@homesmortgage.net