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The US economy is showing signs of panic as mortgage rates have been very unstable throughout the week.
Earlier in the week the Federal Reserve announced that it was going to pump $200 billion into the US mortgage lending industry to free up equity for lenders. Mortgage rates took a slight tumble in response to the news but have since begun to climb.
An overall look of the economy shows oil prices reaching record highs, unemployment still rising and overall inflation beginning to slowly creep up on the economy. All are signs that the mortgage industry does not take well to as far as mortgage rates are concerned.
There is a bit of good news on the horizon though. Next Tuesday, March 18th the Federal Reserve is expected to cut interest rates once again. The Feds are expected to cut interest rates by 0.75 percentage points with a possibility of a full point cut. This would bring the Fed rate down between 2 percent and 2.25 percent.
If mortgage rates do decline after the Fed rate cut, don’t expect mortgage rates to decline for long. There may be a short window of opportunity for homeowners and homebuyers to take advantage of mortgage rates following the rate cut. With a gloomy outlook for the economy mortgage rates are expected to continue to rise unless the government takes drastic measures to magically turn the economy around overnight.