Mortgage Blog

Recently I talked to one of my clients(who also reads
my blogs) about the interest rate. He believes that he
has the chance of getting 4% for 30 yr fixed this winter.

The reasons from him:
1)Winter season generally has lower rates.
2)Election year usually has more stimulas plan
3)Fed will purchase more MBS.

Here is one correction from me(Or the article from WSJ):
The Fed are more interested in purchasing treasury than
the MBS now because of the risks involved in those MBS
purchasing. Treasury is more stable. And the Fed purchase
of MBS will put the private investor in a more risk position.

The main driver behind the bond market at the moment is
the potential for further Federal Reserve quantitative easing.
This means economic data will play a major role in the
direction of interest rates in the future. If data disappoints.
then we will see lower rates again.