The Fed’s “Mortgage Shopping Spree”

Drowned out in all the health care reform discussion is a quiet — but big — drop in mortgage rates.

As of this morning, rates on 30-year mortgages are being quoted at 5%.

That’s a big improvement over just six weeks ago, when rates were in the mid-5’s — and thought to be heading higher — based on excess liquidity-driven inflation fears.

Now, the mortgage market and long-term rates appear to be driven by two things:

One. Relatively weak demand, due to the soggy economy; and

Two. The Fed’s concerted program to buy up mortgages and keep the market liquid (it has a cool, $1.25 trillion (!!) war chest to do exactly that).

Not necessarily in that order . . .

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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