Florida Mortgage Blog

FHA Interest Rates Improve to Under 4% again

May 21st, 2014 4:33 PM by Preston Ware

Checking my rate sheet recently I noticed that FHA rates have gone DOWN! A par rate was at 3.75% and I could pay costs at 4.25%. (Pricing varies on each and every loan)

Any kind of improvement is nice. This good news is kind of unexpected because all along we were expecting interest rates to start going higher in 2014. Our government is expected to begin the strategy of easing back the purchase of mortgage backed securities which has helped maintain interest rates at historically low levels.

The strategy here is that when the Fed is actively buying these securities prices stay high and yields or interest rates stay low. If they stop prices will fall and interest rates will rise.

Federal Reserve Ben Bernanke has said that the Fed intends to begin the end of the purchasing but based on two key signs. Two signs that have been tough to over the last few years.

  1. Unemployment rates low. Currently I believe we are in the 6% range.

  2. Inflation rates in an acceptable range. Currently they are around 2%.

To price out a loan please give me a call at 561-329-0075

Posted in:General
Posted by Preston Ware on May 21st, 2014 4:33 PM

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