The Fed Holds Rates in Their September 2023 Meeting

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Mortgage rates don't always follow Fed actions.

The Federal Reserve Board left policy rates unchanged at their most recent meeting, as expected. Mortgage rates may not remain steady, though.

Mortgage rates have a mind of their own.
Mortgage rates are based on the demand for mortgage backed securities (MBS). Investors are more interested in what the Fed may do next than what they just did.

The Fed gave us some hints: Probably more hikes to come.
In a statement issued after their meeting, the Fed reiterated their goal of keeping inflation at 2% and affirmed that future actions will depend on economic indicators. However, the majority of Board members predicted higher rates by the end of the year.

Since MBS investors are considering possible future Fed action, as well as other market forces, it's possible mortgage rates will change even though Fed rates did not.

Where does this news leave you?
If you are ready to make a move, we have programs that can help mitigate high rates. Options like fixed rate buydowns, hybrid ARMs and HELOCs can help you move forward with your plans. If you want to wait a little longer for more favorable rates, this is a good time to start preparing so you’ll be ready when the time is right for you. 

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Background on the Fed:

  • The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
  • The Fed has a standing goal to maintain inflation within a 2% range. Over the last year, they hoped to slow spending and inflation by making borrowing more expensive.
  • The rate was lowered to near zero in March 2020 in response to the pandemic. These historic measures are now being reversed.
  • The Fed raised rates for 11 of the last 13 meetings, with pauses in July and September. The mid-range benchmark borrower cost is currently at its highest level since 2001.

Don't let interest rates hold you back from making a move or accessing cash. We're still closing loans every day!

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