Mortgage Rates Drop Sharply After Fed Announcement

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Posted To: Mortgage Rate Watch

Mortgage rates came roaring back today after the Fed held steady at record-low policy rates. While the Fed Funds Rate doesn't directly dictate mortgage rates, the two tend to correlate over time. At its most basic level, the Fed rate dictates the cost of short term money, which has ripple effects that carry through to longer term financing costs, like those associated with things like 10yr Treasury notes and mortgage rates. Not only did the Fed forego a rate hike, they were also noticeably more downbeat about inflation and global growth/stability. It's just as likely that these longer-term implications helped longer term rates (like mortgages) do as well as they did today. All that having been said, the drop in rates merely brings them back in line with last week's best levels. Considering...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/512807.aspx

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