In May, the Fed announced plans to taper bond buying, and this sent rates up almost a full percent over the last several months. The Fed announced plans to taper b/c the economy had been improving; Fed officials believed continued interest rate support would be less necessary.
But, in recent weeks, unemployment and other economic indicators have been relatively weak, so the Fed changed course in a surprise move and decided to continue full speed ahead with its interest rate support.
What this means for buyers and borrowers: Rates fell about 1/4% yesterday, giving buyers another (probably short) window to take advantage of extra low rates.
Will rates fall back to previous, early 2013, levels? Probably not; today’s window of 1/4% lower rates is a gift and should be taken advantage of.
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