Mortgage Rates Fallingby Tim Manni
Good news for loan shoppers: the rate on a 30-year fixed rate mortgage dropped to 5.49% Wednesday evening from 5 .54% on Tuesday. Fixed rates have continued to ease since the Fed announced their $600 billion initiative to buy Fannie and Freddie debt and mortgage-backed securities (MBS).
The Fed’s plan to purchase $100 billion in F&F’s debt will serve to tremendously ease their costs. The central bank’s guarantee to purchase $500 billion in MBS has generated a new buyer in the market, accomplishing the goal of allowing fixed rates to drop further.
If you caught wind of the rumor that the Treasury Department was working on a program to lower rates to 4.5%, you would have noticed there has been little to no mention of it since. Media outlets broadcasted it as a possible initiative, when in reality it was merely just a topic of discussion. If you’re interested in reading more about it, be sure to read our post “More Isn’t Always Better.”