The Federal Reserve (The Fed) triggered an impressive bond market rally in the middle of this week that pushed mortgage rates down one eighth of a percent. The result is that conforming no point 30 year fixed mortgage rates now average 3.75 percent with 15 year rates closer to 3 percent. The Fed triggered the rally by committing to a gradual path to raising its rates in 2015 due to revised down projections for growth and inflation. Inflation is a general measurement of the amount of money transferring hands and is a proxy for overall gainfulness of employment in the U.S. Jobs are up but inflation has been below targets for 34 straight months. The Consumer Price Index currently estimates inflation at -.o1 percent since January 2014 versus the Fed’s goal of approximately 2% per year by 2017. Interest rates should stay low for the medium term as the bank continues to shepherd the economy upward. Expect rates to rise in the summer, and for them to stay below 1 percent for the rest of 2015.
For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.