The mortgage industry received some big news this morning that will likely overshadow the Gross Domestic Product and Consumer Confidence reports today.
One of the biggest news items is the Fed's announcement that it will purchase $600 Billion worth of Mortgage-Backed Securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae. This should help increase the availability of credit, while also lowering fixed mortgage rates. In addition, the Fed will allocate $200 Billion to create liquidity in the auto, student, and small business loan markets.
News of these plans is already helping push mortgage rates lower, as Mortgage Bonds have had a strong rally and appear headed for their price highs of 2008. For now, I recommend floating to see how much more the pricing improves.
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