Wednesday, November 26, 2008

Mortgage Rates Drop Almost 1 Point In One Day On Fed's Plan

$7.7 Trillion later, it looks like the Fed and Treasury have finally done something to lower mortgage rates. Yesterday's $800 Billion plan aimed at "consumers" funnels $600 Billion to Fannie Mae and Freddie Mac to buy up debt. The mortgage market in response saw rates from from 6.38% to 5.5%. A significant drop in rates is an absolute must to stimulate the ailing housing market, and the Fed's move, though belated, is a relief. Let's hope that this is not just a quick knee jerk reaction, but a trend that will hold and continue.
U.S. Mortgage Rates Drop Most In Seven Years On Fed Plan (Bloomberg)
U.S. Plans $800 Billion In Lending To Ease Crisis (NY Times)
Trying To End The Mortgage Rate Lag (CNN)
Mortgage Seekers Benefiting From Fed's New Plan (Washington Post)

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