Fed Cuts More, And Rates Dip, Dip, Dip…
First off, some major props to John Cannon with Intero Mortgagefor some great insights.
So yesterday, the Federal Reserve cut its target for a key interest rate to the lowest level on record and pledged to use “all available tools” to combat a severe financial crisis and prolonged recession.
The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent.
Federal Chairman Ben Bernanke and his colleagues also pledged to use “all available tools” as they struggle to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century.
And as it turns out all of the markets liked the Fed cut . The Stock market that day was up about 350 points, but it did not come at the expense of the Mortgage bond market, as is often the case. Mortgage rates dropped, although slightly.
15-year fixed conforming, 5.00% with no points
30-year fixed conforming, 5.125% with no points
15-year fixed up to $625K, 5.75% with no points
30-year fixed up to $625K, 5.25% with ½-point
Another thing that was announced was that the $625K loans will not have the $100,000 cash out limit that the $729,000 loans had last year. This is huge for buyerswho want to roll first and second mortgages together at these relatively low rates.
Realtor, Marathon Man, "Man of a Thousand Voices".
