Mortgage Rate News

Interest rates closed out the month slightly lower than they started. The difference is negligible.

     Analysis:

Consumers are budgeting and spending less money, putting off major purchases, delaying remodel projects, and the equity in their houses isn't growing quite as quickly as it once did.

The economy is slowing.

Or it will be stable for the next the years.

Different experts are suddenly all over the map.

Expect many elements of the economy to remain stable. Unemployment will probably stay low, inflation will remain in check, and interest rates will stabilize.

However, that does mean that we have higher interest rates, higher energy prices, and slower housing growth than we've experienced during the the last several years. Compared to then, things will seem slower - but it may actually be that we are just experiencing a "normal" economy for the next year or so.

Perhaps it would be more correct to say that we are on the glide path to a soft landing for the economy sometime in the future.

So, will the Federal Reserve Board stop raising interest rates?

Probably.

Unless inflation begins to accelerate, the Fed is likely to take a break from bumping up short term interest rates. The major wild card is that inflation is not entirely under control in other countries and they will be raising interest rates. That will probably lead to a falling value for the dollar, meaning imports will cost more and that could cause some additional inflation, meaning higher interest rates and an even slower economy at some point in the future.

In time, things will begin to equalize.

Interest Rate Future

Most likely, interest rates will remain fairly stable with some bias toward the up side.