The Gorman Blog

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Mortgage and Lending with Gorman and Gorman Residential Lending

The Federal Reserve kept interest rates near zero on Wednesday and said the economy is improving. But the Fed also pointed out ongoing job losses could dampen a recovery. As a result, the Fed kept its federal funds rate, an overnight lending rate that guides rates on various consumer and business loans, in a range of 0% to 0.25%. Rates have been at that level since December.

The Federal Reserve also said it is slowing the pace of a program to lower mortgage rates and prop up the housing market. It will stretch out its goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae until the end of the first quarter of 2010.

As you may or may not know, Mortgage-Backed Securities (MBS) dictate long term home loan interest rates. When these bonds go up in value, home loan rates conversely go down.

Comments (1)

Richard Weeks
Dallas, TX
REALTOR®, Broker

Aaron,

Thanks for this information.  Just hope it will have a positive affect on the economy.

Sep 23, 2009 07:15 AM