Wednesday, December 17, 2008

MBS Market Rallies on FOMC Announcement - Mortgage Rates Going Lower

MBS saw an afternoon rally yesterday, due to the FOMC's announcement to cut the Fed funds rate to a range of 0-.25% and their statement: "... the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant." MBS investors were overjoyed and are hopping on the (gravy) train.

MBS is also spiking higher (up 90bps so far) in early trading this morning and we should see rates improve by 1/4% or more this AM. When prices go up, rates go down.

FNMA 4.5 coupon

If you're on the fence with refinancing or purchasing, you may want to jump off.

1 comment:

jumper said...

thinking of jumping...but could you give an example of what 'lower' means? saw a rate for 4.99 % w/some outfit advertising on Trulia (sorry, no link). 30 yr fixed.