Interest rates continue to move up and down. The purchase of mortgage backed securities (MBS) has given stability to the mortgage market until today when we saw an across the board drop in prices in both stocks and bonds. The 10 year Treasury was especially hard hit, but MBS sales took a significant hit on today’s market too. Intraday repricing was the norm. Afternoon interest rates were nearly 1/2 percent higher than morning rates. Overall, another interesting day on the mortgage market.

This week is nearly gone and we have seen more action, both up and down on the mortgage market. So, where did we end up after the Fed’s announcement yesterday? Well, no surprises, they aren’t going to lower the rate to less than zero. However they did say some things in their announcement that mortgage backed security buyers didn’t care for, like,  “economic conditions are likely to warrant exceptionally low levels of the Federal Funds Rate for some time” and that “inflation pressures will remain subdued in coming quarters.”

 
I am afraid that comments like this will continue to keep some people on the sidelines. The other interesting information that came out yesterday was that the Fed would continue to purchase MBS even through June. However, we found out that the Fed was buying 5.5% and 5% bonds and those are the ones that will be paid off in a lower rate so the Fed will get their money back sooner. The one thing this doesn’t do is lower rates to 4.5%.

Economic data continues to be on the down side as we have higher unemployment figures and more announcements of layoffs make the news. We continue to have a very volatile credit market, so hang in there. Don’t forget to fill out the rate watch form on the Oregon Page. If you are waiting until you get that “perfect” rate, when will you know it is there. The form is very simple and non binding. However, I will keep you posted if we get close to your trigger point.