Mortgage Rates Stay Flat but Movement May Be on the Way
Mortgage rates held flat again this week, but sharper movements may be on the way as lawmakers reportedly move closer to a stimulus deal
Mortgage rate dynamics over the past several months have been less dependent on economic data and more on policy-related matters – both fiscal and monetary – as well as epidemiological developments. Wednesday’s statement from the Federal Reserve had the potential to move rates, but bond yields – along with mortgage rates — barely budged after the central bank stated plans to maintain their current pace of bond buying and commitment to keeping the federal funds rate low. On the fiscal policy side, reports are that a new relief deal may be drawing near. A new spending package may place some upward pressure on mortgage rates, particularly if the package contains more than has been reportedly debated. Investors have expected the spending package for a while now, meaning it’s likely that most of their reaction has already been priced in.
Overall, mortgage rates remain very low and are unlikely to shift unless a blockbuster spending package is passed before the end of the year.
