Excuse me, while I pick my chin up off the floor, but today has been an AMAZING rally for mortgage rates. As the dust settles on this spike in Mortgage Backed Security prices over he next couple days, this will make an incredible opportunity for homeowners in Dallas Fort Worth to lock into the lowest rates on Fixed programs such as FHA, Conventional, VA, and USDA – and even Jumbo mortgage programs.
Here is what happened –
“In an unprecedented step, the Fed’s policymaking panel launched another aggressive economic stimulus program today by saying it will buy $40 billion of mortgage-backed securities per month until the outlook for jobs improves – and as long as inflation remains contained.
The new purchases combined with the continuation of “Operation Twist” will increase the Fed’s buying appetite by about $85 billion per month through at least the end of the year. In the Fed’s first two rounds of economic stimulus, dubbed QE1 and QE2, the Fed had a buying appetite of around $100 billion per month.
The latest purchases build on the $2.3 trillion in Treasury debt obligations and mortgage-backed securities the Fed has already bought.
In an additional move, central bankers said they are not likely to raise their benchmark short-term interest rates from current rock-bottom lows until late 2014.
There is quite a party going on as the mortgage market is experiencing a “moon-shot” rally as I write. Stocks are rallying too — but Treasury debt prices remain soft.
There is absolutely no doubt the market is always right” – Larry Baer – Market Analyst in Dallas Texas
The lines are the chart represent the prices of Mortgage Backed Securities. Mortgage rates and prices are based on the trading of these securities, and when the prices go up, the rates go down. See the spike below in MBS prices this afternoon.