Due to the lowest yields on mortgage securities in nearly six months, all indications point to current mortgage rates remaining low, at least for the interim. According to statistics assembled by Bloomberg, Fannie Mae's 30-year fixed-rate mortgage rate fell yesterday from 4.12% to 4.07%, which represents a low not seen since May 21.
In an effort to keep current mortgage rates low in hopes of stabilizing the slumping housing market, the Federal Reserve has purposely slowed their purchase of the $1.2 trillion in mortgage-backed securities they committed to purchasing at the beginning of the year. Having already surpassed the $1 trillion point, it is anticipated that the Federal Reserve's slowdown will keep current mortgage rates low throughout the first quarter of 2010, at least. The Federal Reserve is currently buying mortgage-backed securities at a rate of $3 billion to $4 billion per day, which is a marked reduction from the approximately $5 billion per day it was purchasing earlier in the year.
Even though refinancing applications are down, the impact the Federal Reserve has on current mortgage rates will dictate how long the mortgage rates will remain at these historically low levels.
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