Mortgage rates and concerns about those rates were eased as the Federal Reserve maintained its patient, wait-and see-attitude this week. Nothing from this week’s meeting indicates we are likely to see the Fed hike interest rates at any time in the near future.
While the action was not unexpected — as the usual influences on the decision to raise rates are not there — China’s recent stimulus actions in its economy will likely weigh on the Fed for the rest of the year even if things change in the next few months. China’s actions may have the Fed stay the course when they would have likely been considering rate hikes.
Freddie Mac’s April forecast sets the 30-year fixed-rate mortgage at about 4.3% for the remainder of 2019. Great news for buyers, sellers, and the industry. The current rate environment will likely result in 5.98 million home sales this year.
Also contributing to the rise in home sales will be the fact that wage growth has bumped up and is growing at the same rate as home prices for the first time in several years, according to Freddie economists. That is good for a variety of reasons. While projected home sales look good, it doesn’t appear that builders are buying in or intend to be help much with inventory. New construction is still projected to remain flat for the near future.
All in all, not bad news. Just enough reason to raise one up this Cinco de Mayo.