This isn’t what we expected when the Fed raised short-term borrowing costs in December, Freddie Mac chief economist Sean Becketti said. “For now, though, sub-4-percent mortgage rates are providing a longer-than-expected opportunity for mortgage borrowers to refinance.”
Fed policymakers meet again in March, but economists put the odds of another rate hike then at less than 10 percent. Most expect Chair Janet Yellen and her team to act in June. Don’t fret if they do. Mortgages are having a historic run, which probably will continue for a while.
“Of all the concern we have, the availability of bank credit to both businesses and consumers isn’t one of them,” said Carl Tannenbaum, chief economist of Northern Trust and chairman American Bankers Association economic committee, which released its annual forecast this week. “Housing, which is gradually finding its footing, will continue to do nicely.”
We think credit availability is a concern, especially for first-time and self-employed borrowers. And the housing recovery’s progress has been mixed. But low mortgage rates are continuing to drive sales and prices.
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