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What the coronavirus outbreak means for home loans, mortgage rates
Mortgage companies won’t drop interest rates further: Quicken Loans CEO
Quicken Loans CEO Jay Farner discusses interest rates as the 10-year Treasury yield fell below 1 percent for the first time in history.
The Federal Reserve cut short-term interest rates by half a percentage point on Tuesday in an effort to protect the economy from more damage from the virus outbreak. The move may present options for mortgage shoppers.
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What does all this mean for home buyers? Or those looking to lock in a mortgage rate? For owners considering a refinance? And for those holding an adjustable-rate mortgage?
WHY THE FED CUT INTEREST RATES
Mortgage rates started falling weeks before the Fed’s emergency rate cut. By reducing the federal funds rate, the Fed is playing catch-up, following the lead of the market forces that set mortgage rates.
FED RATE CUT TO BOOST HOMEBUYERS' SPENDING POWER
The novel coronavirus identified in late 2019 has been of increasing concern to the world’s stock and bond markets. The distress stems from uncertainty about how the officially named COVID-19 outbreak will impact manufacturing, tourism, travel, the hospitality industry and even consumer spending.
FED MAKES EMERGENCY RATE CUT TO COMBAT CORONAVIRUS FALLOUT
“Lower rates are likely to drive refinances higher and may entice home buyers out to shop as well. That’s certainly the Fed’s hope,” says Danielle Hale, chief economist for Realtor.com. “However, if buyers are hesitant to go shopping because they want to avoid contact with others, this could dampen home sales.”