Mortgage rates are mostly unchanged this morning compared to last Thursday.
In case you missed it the Federal Reserve did announce plans for a third round of quantitative easing (QE3) last week. According to their statement the Fed will buy up to $40 billion in mortgage-backed bonds (MBS’s) each month for an open-ended period of time.
The objective of the plan is to maintain historically low interest rates and support conditions in the housing market.
Will the Fed announcement cause mortgage rates to move even lower? Initially their announcement caused mortgage rates to drop by about .125% but they’ve since retreated to the same levels as before the announcement. I expect rates to hold pretty firm at these levels this week. Moving ahead is any one’s guess.
In Europe solutions to the debt crisis continue to move along at a snails pace. Despite a lot of talk policymakers are still hammering out details on how to police European banks. Until a unified regulatory structure is put in place bailout funds will not be doled out.
Current Outlook: neutral