Good morning everyone,
The Federal Reserve Open Market Committee (FOMC) meets today and tomorrow with their policy announcement, and any decision regarding the Overnight Rate, to come on Wednesday afternoon.
The markets are expecting a rate cut.
So, should you expect to see lower mortgage rates. Probably not. :(
What?
Well, it is important to remember the reality of the times we are in. The normal investors that used to be hungry to buy mortgage-backed debt have little appetite for this type of paper these days. Just read the news headlines and you can see why.
So, with a shortage of potential buyers of the debt the rates have to rise to attract buyers. Those buyers are the ones that put up the money you are borrowing. Think of it this way, as a group, anyone that needs a mortgage is treated as higher risk these days.
The higher risk is that the investor can keep their money in their hands.....no risk.....or they can lend it out....with loss of control comes risk.
Until we see the Federal governement intervene (which my gut tells me they will, it's just when) we are bound to see higher mortgage rates.
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