Over the past month, market watchers have been on quite a ride. With the historic government shutdown, the up-and-down drama of the stock market, and recession fears hovering, it’s been a fascinating time to follow mortgage rates.
The good news: we’re staying on top of every fluctuation so you don’t have to. Here’s what you need to know about mortgage rates for February:
The Federal Reserve’s benchmark rates (aka Federal Funds rate) were raised several times in 2018, as the economy showed strong and steady growth. Mortgage rates also went up based on expectations that the Federal Funds rate would continue to be raised.
Towards the end of the year and into early 2019, growth slowed and recession fears began to take root. So far, those fears haven’t materialized.
One caveat to note: During the prolonged government shutdown, official economic data became unavailable. So experts had to look more closely at data from non-government sources like housing data, consumer sentiment data, and small business optimism data. But there are still questions lingering over the official data that’s yet to be released. Will it renew recession fears? Is the current health of the market counting on rates remaining low? Unfortunately, we can’t know until we see the data, and it will be a couple of months before that happens.
Based on the economic data we’ve looked at, we think it’s unlikely that the economy will take a big plunge into recession anytime soon. More likely, we’ll move towards a small recession next year, which will happen gradually. In the meantime, concerns about the prices of essentials can still make the Fed hike rates later on in 2019. And we can expect mortgage raise to rise, if that happens, too.
At Eave, we’ve held our rates steady since the beginning of the year, in sync with market rate movements. We’re not jumping the gun on future market movements. Like the Fed, we’ll remain patient to see what the data tells us, and adjust accordingly.
What This Means For You
Mortgage rates decreased in late 2018 and remain at these low levels with gradual increases on the horizon for 2019. That means it’s a great time to buy a home! Market conditions are especially advantageous for those looking to upgrade their home this winter. We probably sound like a broken record at this point, but it bears repeating: if you’re planning on buying and in a position to do so, take advantage of these low rates while you can. They won’t be around forever.
At Eave, we look closely at several economic data sets daily. Of course, we’re tuned into the Federal Reserve. But we look at other data points too. One thing we’re always tracking is growth and decline in the housing sector. This includes how many new homes are being built, and how many existing homes are selling. We also look at general factors driving economic growth, like the behavior of individual consumers, industries and production, and small business, amongst others. Over time, it becomes easier for us to analyze patterns and trends that influence the economy.
In A Nutshell
Mortgage rates are low now, but will likely go up in 2019. When and how much they’ll go up will depend on as-of-yet unreleased economic data.
At Eave, we benchmark our rates daily, so you get the best possible deal on your mortgage. Check out our real-time mortgage rates here.