Thursday, January 21, 2010
Rates on 30-year mortgages fall to 4.99%
This article discusses how rates on 30 year mortgages have continued to fall over the past three weeks. The rate is currently 4.99%, which is only slightly higher than its all time low of 4.71% in early December. The Federal Reserve has put 1.25 trillion dollars into mortgage backed securities, which is why rates have been decreasing. The Fed has done this in order to make buying a house more affordable and thus help the failing housing market. However, when the Fed stops pumping money in later this year, it is unclear whether mortgage rates will remain at theses historic lows.
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The Federal Reserve put 1.25 trillion dollars into mortgage in order to bring down the mortgage rate. With a lower mortgage rate,people has more incentive to buy house. In other words, to make the mortgage rate low is one way to stimulate consumption.
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