The Fed announced it would cut interest rates a full percentage point Sunday night, in addition to a $700 billion quantitative easing program.
When the Fed cut interest rates two weeks ago, mortgage experts noted that the central bank was “catching up” to where markets had headed. “Mortgages respond to market forces and not to the Fed,” Holden Lewis, mortgage and real estate expert at NerdWallet, told MarketWatch earlier this month. “The Fed is actually following and not leading when it comes to mortgage rates.”
In particular, mortgage rates in the U.S. roughly track the direction of the yield on the 10-year Treasury note TMUBMUSD10Y, 0.649%. The 10-year Treasury had fallen to all-time lows in recent weeks as investors fled to the safety of bond markets amid the downturn in equity markets. Last week, mortgage rates actually increased slightly, in part because some lenders had artificially raised rates to stem the number of people applying for home loans and give themselves time to work through the backlog of applications that accumulated as rates fell.
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Mortgage rates are more closely tied to the bond market, usually when stocks are falling, investors run to bonds & push prices up which cause rates to decline, however in a panic like this,investors are selling bonds to & going to cash, so bond prices are falling, rates going up
Why not? What other way this can help people if the mortgage interest rates are not lower? Pathetic
Someone didn't get the memo.
The coporate elite and the laggards both get interest free money. The working people pay infinitly more at 2% . Just sick
I wish people would read this before coming to the bank and inquiring about a “zero percent mortgage” they saw on the news. Mortgage rates are not based of Fed rate!
As long as this foolishness continues, banks will fall to lowest valuations. If people see benefits, recovery is faster and everyone sees benefits
Lower mortgage rates are good now to increase buying and people spending. Remove the mandatory 20% down payment for the home and younger people will start buying homes. Think about all people not just 1%
Why not? People has to find some savings and mortgage companies need to adjust to help them & establish long term relationships with barrowers.
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