Mortgage rates seem to be holding steady for the last month.  The Federal Government's purchase of more Mortgage Back Securities (MBS) seem to have played a huge part in keeping interest rates low.

Once the Fed's announced that they would be buying more Mortgage Back Securities at their last meeting in March, the market reacted positively.  Since that meeting the Fed's have been purchasing around $30 billion in MBS per week, which would account for the leveling off of these near historic low interest rates.

The Fed's hope that by lowering the interest rates, that in turn we will see an increase in refinancing, and sale of houses.  If we take a close look at what has been happening the past couple of weeks, we can see that at least initially the market has reacted as the Fed's expected it to. I can state from personal experience that over the last month I have seen a big increase in both purchase, and refinance loans.

The long term effect of what the Fed has done still remains to be seen, but for the short term it is very evident that they have achieved their desired results.  The economic news that is expected this week should give us a good indication of whether we are still headed in the right direction.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com