Mortgage Rates Hit Another Low

Mortgage Quotes In The 4's Again

According to the Freddie Mac Primary Mortgage Market Survey (PMMS) for November 5, 2009, the average 30 year fixed interest rate was 4.98% costing .7% points. After being in the 4's most of October, current mortgage rates started to go up at the end of last month. Despite some positive economic news, the bond market seems to be holding its own against stocks, keeping yields low. Mortgage news about the lowest interest rates will be linked to general economic data. As the economy becomes strong again, mortgage quotes will likely go higher.

Unwinding the Fed's Moves

The Feds announced last week that it would be buying less agency debt than it had previously announced. Instead of buying $200 billion in agency debt, it will only buy $175 billion. The Fed's intention is to start unwinding the artificial means being used to keep today's mortgage rates low. Buying agency debt provides liquidity to the secondary market and helps maintain the lowest mortgage rates possible. As the Fed's program comes to an end, expect to see mortgage rates go up.

Refinancing Now Is a Good Idea

If you need to refinance, because perhaps you have an ARM, now would be a good time to get a mortgage quote and lock in an interest rate. Today's mortgage rates are not likely to last. Although the Fed has repeatedly said that interest rates will remain low for a long while, their position on that topic is shifting slightly. As the economy stabilizes, the Fed will be more and more concerned about the negative repercussions of the extraordinary actions they have taken to stimulate the economy. Many economists believe that the Fed will begin raising their primary interest rate to tighten monetary policy before inflation becomes a problem.