Mortgage rates post Fed meeting

As expected the Fed announced a 1/4 point increase in Fed funds rate….and just to be clear; they did not raise mortgage rates (see the below Fed and mortgage rates post for the relationship between the Fed and mortgage rates).  So what happens next?  Hard to say but most likely mortgage rates will move to various economic reports and other markets.  Meaning if the data shows the economy weakening then that should help push mortgage rates lower or if the data points to a stronger economy then mortgage rates should move higher.  Also bond yields may move based on dollar strength; as the dollar gets stronger yields might fall and thus California mortgage rates should improve.

Every year around this time we hear the usual rates will be higher next year. And not just slightly higher; dramatically higher.  However that has not happened.  While we’ve seen some years with slightly higher rates (nothing dramatic) we have seen years of flat to lower so guessing what’s in store for 2016 is difficult at best.   Due to the holidays and cold weather the period between December and February usually sees a decrease in refinance and purchase volume and then we see an uptick in March and April.  Sometimes mortgage lenders will be aggressive with rates during this time to add new business to a traditionally slow period.