Mortgage Interest Rates and the Fed for your Arizona Home

If you’re interested in mortgage rates, there’s one thing you should keep in mind – the Federal Reserve’s actions plays a huge role in determining them. In fact, as sentiment about the Fed changes, so do mortgage rates.

The Affect of the Fed Raising their rate on your Mortgage Rate for you Arizona Home

Just to recap when we talk about the Fed and rates we are referring to rates on auto loans, credit cards and Home Equity Line of Credits.  Of course mortgage rates are indirectly affected so we watch the Fed’s words and actions closely.

Right now, it looks like the markets are leaning towards the Fed being forced to pause hiking their rates in May, with about a 60% likelihood of a pause. Just yesterday, it was a 50/50 chance of a rate hike, so the sentiment has shifted a bit more towards a pause.

Overall, the markets are still anticipating that the Fed will have to pause and then start cutting rates by September, with the Fed policy rate around 4.25 or 4.5 by December.

Here’s the bottom line: if the markets become more convinced that the Fed is hogtied and will have to pause rate hikes and even start to cut rates, we will see mortgage rates improve. However, if data leads the markets to feel that the Fed has more leash to work with and will continue to raise rates to fight inflation, mortgage rates will creep higher.

So, keep an eye on what’s happening with the Fed – it could have a big impact on your mortgage rates. And if you have any questions or concerns, don’t hesitate to reach out!