The Fed is making good on its promise to purchase mortgage backed securities. According to this article more than $10 billion in such securities were purchased in the first week of January. The program is having the desired effect as well — mortgage rates remain very low. All good news to folks looking to purchase a home or refinance into a better rate.
Here is an excerpt from the article:
The Federal Reserve Bank of New York said it bought $10.2 billion in mortgage-backed securities this week as it launched a program to lower home borrowing costs.
The purchases are part of a $500 billion program announced by the central bank in November as a way to help stabilize the U.S. housing market, which has entered its third year of a downturn. The MBS — issued by Fannie Mae, Freddie Mac and Ginnie Mae — have rallied since the Fed announcement, sending yields that influence consumer rates sharply lower.
The average fixed 30-year mortgage rate dropped for a 10th consecutive week as of Thursday, to 5.01 percent, the lowest since at least 1971, according to a Freddie Mac survey.