Just a quick update on the lowest mortgage rates we’ve seen in a long time! I was sent this today:
Conforming 30 yr fixed : 5.25%
Conforming 30 yr fixed: 5.0%
30 yr FHA rates: 5.125%
30 yr VA rates: 5.375%
JUMBO 5 YR ARM: 5.5%
JUMBO 7YR ARM: 5.75%
Here is what happened that caused mortgage rates to drop:
The mortgage industry just received a nice boost! The Fed is going to buy Mortgage Bonds. The Federal Reserve just announced that it would purchase $600B of Mortgage-Backed Securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae. This brilliant move by the Fed is designed to help increase the availability of credit, while lowering fixed mortgage rates. And this move is already lowering mortgage rates so far today as Mortgage Bonds are up a whopping 128bp and appear destined to retest the price highs of 2008.
In addition to purchasing debt backed by Fannie and Freddie, the Fed will set up a $200B program to support consumer and small-business loans. The Fed looks for the plan to create liquidity in the auto, student and small business loan market.