The Federal Reserve announced today that it will sell $400 billion short term securities and reinvest that money into long term holdings like U.S. treasuries. The effort is being called “Operation Twist” and has already made an inpact on already low mortgage rates. You can see the image I attached that clearly shows a jump in price for mortgage bonds today, higher prices for bonds means lower mortgage rates.
There is a lot of disagreement about what effects this new move will bring for the economy and for inflation in particular. There were 3 Fed bank presidents that disagreed with the decision.
What impact will this have for mortgage rates? In Charlotte, rates have already been at record low levels and this will likely push them even lower. We might even see 3.5% 30 year fixed rates… it is not impossible. Rates will stay low as long as investors are afraid to put their money at risk in the stock market and there aren’t better alternatives that are viewed as safe investments. US Treasuries and mortgage bonds remain a safe haven for investors and that keeps our rates low!
If you are thinking of buying or refinancing, NOW is the time! Mortgages are harder to get and starting early can help reduce stress and avoid delays. Give me a call today at 980-721-7478 or simply click on the apply online button above to get started.