Industry News

Short-term interest rates rise; mortgage rates down

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The Federal Reserve's Open Market Committee today continued its course of raising its target for the federal funds rate by 25 percent, bringing it to 1.75 percent. Despite the short-term rate hike, mortgage rates have stayed much lower than originally predicted, keeping the hot housing market humming. At the beginning of the year, economists predicted that interest rates for mortgages would come close, if not hit, 7 percent by the end of the year. Instead, 30-year mortgage rates hit a four-month low last week at 5.75 percent. And despite today's widely expected Fed rate hike, rates were at 5.32 percent, according to Bankrate. Today's move is the third hike in four months, beginning with a 25 basis point hike in June. That was the first time the Fed had raised the rate in four years, and the Fed appears poised for more rate hikes until it reaches what it considers a neutral monetary policy. In its policy statement, the Fed said it believes that "even after this action, the stance o...