ARMs Decline in Advance of Fed Meeting

Interest rates for 30-year fixed-rate mortgages held relatively steady at 5.88 percent for a second week, while ARM rates continued to decline to 5.48 percent – from 5.56 percent last week -- amid market speculation that the Federal Reserve (Fed) may cut rates again at its upcoming Committee meeting. Frank Nothaft, Freddie Mac vice president and chief economist said “Currently, the federal funds future contracts suggest nearly a 100-percent probability that the Fed will cut rates at the end of this month.” In its current regional review released on April 16th the Fed noted “reports on real estate and construction were generally anemic for the residential sector” and “economic conditions have weakened since its last report.” In addition, San Francisco Fed Bank President suggested, “the economy has all but stalled and could even contract over the first half of the year.”   Read full article here.