Provided and Written by Casey Hamlin, NorthPoint Mortgage
The pace that mortgage rates have been rising has slowed significantly since the middle of November. I think they will continue to increase thru the end of December as the European Central Bank looks to taper their bond purchases or fail to extend them past March. The Fed Reserve will tell us what they will with the Fed fund rate on the 14th. A rate increase is considered a foregone conclusion, but the announcement will be telling of what the Fed is thinking for next year and investors will be watching closely.
I predict rates will be around 4.5% in the Spring of 2017 due to President Trump’s intent on infrastructure and defense spending at the same time cutting taxes. These policies raise the prospects for increased deficits and inflation. Neither are good for interest rates.