Mortgage rates have not moved much over the last few months as the Fed has droped the discount rate.  In fact, the latest movement has been to the upside.  Inflation, or the fear of inflation is what drives the fixed rate loans and the Fed still fears signs of inflation and will attempt to take action later this year to address this issue. The reduction in rates is passed through to the banks who inturn drop PRIME.  This only helps those that have equity lines of credit that are tied to PRIME.  Those homeowners have benefited as PRIME dropped from a high of 8.25% down to the current rate of 5.0%.  Enyoy this while it lasts - which might only be for a few months.

How will the FED address inflation?  The usual way - increase the discount rate making it harder to borrow money. today's drop  will probably be the last one by the fed as they wait and see what the affect of the stimulus package will be.   The Fed hopes this money gives a boost in the arm to the economy > increase spending > increase demand > increase inflation.  The rollercoaster continues.  Have a great day!