FHA Interest Rates
All bets are off. There are some things that “always” increase rates. Last week, we saw strong corporate earnings, housing appears stable, and the Federal Reserve continues their upbeat tone.
Those things all cause rates to go up. Yet, the FHA interest rate dipped for a 4th consecutive week.
Why? Because every other economy in the globe appears worse off than ours right now. Bad news kept filtering in, starting with the UK banks the week prior, China tightened its money supply, and pick an EU country, it’s in trouble.
The FHA loan rate is strongly tied to where global investors wish to park their money. For the past two weeks, the U.S. has seemed much safer than anywhere else. When investors park their money here, our mortgage rates go down.
Looking forward to this week’s FHA mortgage rate predictions, there is almost no economic data. If foreign investors deem the U.S. safer than elsewhere, FHA rates stay low. If foreign investors think someone else offers a risk/reward they like, the sound will be their money sucking out of the bond market and the consequence will be a significant jump in mortgage rates.
If you are currently considering whether to lock or float a laon, the trend continues to point towards higher rates down the road.
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