Wednesday, November 26, 2008

Fed Announces It Will Buy $600 Billion of Debt; Mortgage Rates Drop

The Federal Reserve announced Tuesday that it will buy $600 Billion in mortgage assets from banks (total Bailouts now stand at $7 Trillion, btw.) By the end of the day, mortgage rates dropped significantly to 5.5% for a 30 year fixed.

The move is aimed at helping to lower housing inventories and try to stabilize the market in an attempt to finally find a bottom because housing prices keep plunging. The Case-Shiller Index of 20 Cities, a closely-watched aggregator of pricing, reported a 16% drop in house prices in the third quarter over 2007. It remains to be seen how many new buyers will come into the market. But already, brokers report a flurry of refi's.

Big news.

No comments: