Mortgage Rates At Historic Lows

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The Fed's shocking announcement that they would buy $300 billion in U.S. Treasuries resulted in an immediate .50% drop in the 10 year bond yield from 3 to 2.5%. Since 30 year fixed mortgage rates rise and fall based on the 10 year yield, mortgage rates dropped like a rock late this week. On Friday the rate for a 30 year fixed was 4.98%. This is the lowest rate ever. The Fed hopes low mortgage rates will stimulate home buying and stabilize the market. I still believe the goal is to get mortgage rates to below 4%. This will give all American homeowners the opportunity for a once in a lifetime generous refinancing of their largest debt. Let's see if it works. I for one think U.S. Treasury bonds are due for a major fall and yields will be significantly back over 3% by the fall.-Lou