Just as many predicted, the Federal Open Market Committee, the group that sets the benchmark interest rate for bank lending, elected this week to hold steady and not increase federal funds rate.The current rate is set at between 0.25% and 0.5%, and will remain so, until at least the FOMC’s next meeting in June.According to a statement from the FOMC, labor market conditions have “improved further” since the FOMC’s last meeting, but “growth in economic activity appears to have slowed.”The good news for housing, at least in the eyes of the FOMC members, is that the housing sector “has improved further” since the beginning of the year.“A range of recent indicators, including strong job gains, points to additional strengthening of the labor market,” the FOMC said in its official statement.“Inflation has continued to run below the Committee's 2% longer-run objective, partly reflecting earlier declines in energy prices and falling prices of non-energy imports,” the FOMC continued. “Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.”One interesting absence from the FOMC’s latest statement is a mention of “global risks” as a concern for the strength of the U.S. economy.In its last statement in March, the FOMC said “However, global economic and financial developments continue to pose risks,” but there is no mention of the global economy in the latest FOMC statement.“In light of the current shortfall of inflation from 2%, the Committee will carefully monitor actual and expected progress toward its inflation goal,” the FOMC stated.“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the FOMC continued. “However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

What does this mean for mortgage rates?

The yield on the benchmark 10-year U.S. Treasury note fell to its lowest level ever Tuesday, signaling that this extremely low interest rate environment isn't going anywhere quickly. Mortgage applications already surged on Wednesday, and that didn't even include this new record low in yields. So get ready buy a home or sell your home.