Federal Reserve leaves key interest rate unchanged, citing low inflation


It’ll be interesting to see where mortgage interest trends over the next few months.  Mortgage interest rates have ticked up over past few weeks in anticipation that the Federal Reserve would raise Fed rates last week.  Many economists still expect the Federal Reserve to move Fed rates from zero where it has been or near since 2008.  Most economists expect mortgage interest rates to gradually increase towards 4.5% between now and end of 2016.

Many buyers focus on housing prices, forgetting that financing costs can be even more costly over the lifespan of the mortgage if mortgage interest is higher months from now.  Higher mortgage rates will be an even great factor as it appears that most Silicon Valley communities have seen housing prices level towards a moderate appreciation rate.