MORTGAGE RATES LOWER FOR THE SECOND STRAIGHT WEEK: Rates had another great week. The bond market finished 84 points up on the week – improving rates by about .5% in costs. You can now get a 30 year fixed at 4.75% with less than a half of a point. You can go below 4.75% on the rate, but costs jump up a lot and it doesn’t make a whole lot of sense. 15 year fixed dropped to 3.99%. 5/1 ARMs remained at 3.125% , but with lower costs. These are the best rates available so far this year.
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THE FED MEETING: The Fed Meeting and press release on April 27th went largely as expected. The FED is committed to keeping rates low in the short term and will continue its program of acquiring mortgage backed securities through the end of this quarter. At the end of June 2011, the FED has no plans to continue its program (titled quantitative easing 2). The FED is purchasing mortgage backed securities which is inflating the demand and price and helping rates stay low. When they stop buying, rates should go up.
Even with this positive news regarding interest rates right now, rates didn’t lower that much. They have hit a technical wall and the only way they will go much lower is with a major shift in the market.