are rates going to drop below 4%?

September 22, 2011 — Leave a comment

the federal reserve made its third attempt in less than three years to stimulate the economy yesterday by announcing a new effort to drive down long-term interest rates.  HOW? they plan to buy $400 billion in long-term treasurys in effort to nudge down interest rates making it even cheaper for corporations and consumers to borrow.  additionally they intend to reinvest in mortgage-backed securities in effort to keep rates low.  this move by the feds has been dubbed “operation twist“. 

what has happened to mortgage rates thus far?  initially we experienced a knee-jerk reaction as investors poured cash into mortgage bonds therefore driving prices up and rates down approximately a quarter of a percent.  my thoughts are this may be short-lived and extremely volatile while investors decode exactly what the feds are doing and its impact on markets overall.  if you haven’t refinanced OR pulled the trigger on purchasing a new home while money is cheap this may be the time to do so…..with all the uncertainty and wildcards out there its hard to determine how long mortgage rates will hold.

Read the full story here

Advertisements

No Comments

Be the first to start the conversation!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s