Now is the time to pull the refi trigger if you can...
Today's action by the Fed has caused downward movement to mortgage rates.
Markets had been expecting the Fed to commit to shifting their TREASURY holdings to longer maturities (like selling 2-3yr notes and buying 10's), and indeed, that was announced today. 10 and 30yr Treasuries rallied from already impressively low levels on the news.
But the Fed included a somewhat surprising nod to the Secondary Mortgage Market in committing to reinvest the income it receives from monthly payments and periodic pay-offs in its MBS portfolio BACK INTO MBS (aka "mortgage-backed-securities," the bonds that govern mortgage rates). This caused a
massive break of recent highs and pushed MBS well into all time highs. Remember that the higher the MBS PRICE, the lower interest rates can potentially go. Although MBS are the most direct driver of mortgage rates, there are other factors at play.
Today's Rates: The current market is in a state of flux at the moment and mortgage rates either already have or are likely in the process of moving to ALL TIME LOWS. From 4.125% yesterday, Best Execution on a 30yr Fixed is closest to 3.875% this afternoon depending on the lender. In some cases it's 4.0%.
FHA/VA deals are in a bit of a predicament that's keeping them blocked off below 3.75% (there's no secondary market for rates any lower than that right now!). For similar reasons, 15 year fixed conventional loans may be stuck at 3.25%, though that's still an improvement from yesterday.
The secondary market factors driving adjustable rate loans are in a massive state of flux, but one that is mixed between positive and negative. Shorter ARMS are generally the same to slightly better whereas longer ARMS could actually be worse.
Please note there can be a fair amount of variety between lenders and that this has been exaggerated by recent market volatility.
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