Fed might act in June
The Federal Reserve Wednesday released minutes of the April 26-27 meeting of its Federal Open Market Committee, which sets the federal funds rate.
According to the minutes, the FOMC left open the option of raising its target range for the rate in June “if incoming [economic] data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee’s 2% objective.” The rate is currently 0.25% to 0.5%.
The caveat is important. Because growth might not pick up, labor market conditions might not continue to strengthen and inflation might not make progress toward the 2% objective.
The FOMC’s minutes and the stock market’s largely negative immediate reaction didn’t affect this week’s mortgage rate survey because the data were collected before the news was out. How this news of the Fed’s thinking might affect next week’s rate survey remains to be seen.
Rates still low
Overall, mortgage rates remain exceptionally low.
“Big picture, we’re still looking at rates being in a really great place for buyers,” McAllister says.
Low rates may be small consolation for buyers who can’t locate a home they like in their price range due to what the National Association of Realtors recently characterized as “relentless supply constraints.”
In a statement, NAR Chief Economist Lawrence Yun says the U.S. housing market “continues to expand at a moderate pace,” even though home prices are rising in some areas and not enough new houses are being constructed.
“Pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer,” Yun says.
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Mortgage rates reflect mixed economic news
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