Mortgages rates are a funny animal. These last few weeks, mortgage rates dropped dramatically due to the anticipation the Fed's will drop its rate on September 18th. Here is the catch, the bond market has priced in a 3/8th drop in the Fed Rates. What this means is, if the Fed only drops rates by 1 quarter, mortgage rates would actually go up! If they drop the rate a full half percent, most likely mortgage rates will stay the same. Mortgage rates have already been adjusted for the assumption of what the Fed's will do. It is pure speculation as well!
As the owner of a mortgage company, I have many clients that will want to hold off in locking their interest rate, they feel it is better to wait until the Fed's meet. The client feels that mortgage rates will drop when the Fed lowers their rate, at this time it may be to late. Especially if the Fed holds off entirely, then you will see mortgages jump back up.
Remember to find a mortgage company that can lock you in today and re lock your mortgage rate if the rates decide to drop.
Call me anytime about mortgages, rates or our take on the economy!
Bill Nickerson
President
Emerson Lending Company
978-264-4803
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