After the Federal Reserve approved a quarter-point increase in its target funds rate last December – the first increase since June 29, 2006 – the real estate industry, as well as mortgage borrowers, have been concerned about higher interest rates in 2016. So far, all that worry has been unnecessary. With mortgage rates remaining low, now is an excellent time to buy or refinance a house.
Heading into Record Lows
Ever since the Fed raised its funds rate, the 30-year fixed-rate mortgage has been dropping. The reason? Looking for a safety play in a highly volatile and largely negative stock market, investors are flocking to the U.S. bond market. “If stocks are selling [off], and if people are generally pretty panicked about the state of the global economy, bond markets are a natural safe haven,” said Matthew Graham, COO of Mortgage News Daily. “Popular opinion about rates moving higher only helped. Too many people were on one side of that trade, and it almost always makes sense to root for the underdog in those scenarios.” For more on this topic, see