Mortgage Rates Finally Fall

mortgage ratesThe Federal Reserve Bank has been consistently lower rates to jump start the economy but mortgage rates have barely gone down because of the housing crises, that is until last week.

The Federal Reserve Bank annouced that they will buy $500 billion in mortgage backed securities guaranteed by the government-sponsored enterprises (GSEs), Feddie Mac, Fannie Mae and Ginnie Mae, as a result rates on 30 year mortgage immediately dropped about 1%, to around 5.60%.

This week there has been talk that the Treasury is talking with Freddie Mac and Fanny Mae on a plan to drive down 30 year mortgage rates as low as 4.5% which would reduce borrowing costs more. 

Reducing mortgage interest rates will hopefully revive the housing market because homes will become more affordable and will help to stabilize housing prices. Experts are saying stabilizing the housing market will be the first step to lead us out of this recession.

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Author: Brian McKay
December 5th, 2008