Rates are GREAT right now, and are expected to remain relatively steady through the end of the year.
However, we still urge caution as to whether to float or lock a mortgage rate, as almost any global economic activity can give rates a reason to move quickly. But what might be going behind the scenes to influence rate movement? The Federal Reserve would like to raise the federal funds rate (the interest rate that banks trade balances/lend funds with each other). However, raising its interest rate could cause the dollar to rise in value, which would also cause the deficit to rise. If the deficit grows, it would slow the U.S. economy down, and push unemployment upwards. So, the Fed is allowing inflation to cure the Fed position a little more naturally. Thus, the “markets” and their investors expect that the Fed will be content with keeping the Fed funds rate where it is right now – near zero.