Fed chairman Ben Bernanke strongly defended the Fed $2.3 trillion in bond purchases since 2008, strengthening the case for another quantitative easing. He claimed it has helped create more than 2 million jobs and he was considering another installment. Top Fed officials believe that such programs help drive down long-term interest rates in California and rest of the country. The actual announcement is expected on Fed’s next policy meeting scheduled on on Sept 12 and 13.
Mortgage Markets reacted favorably to his statement with Fannie Mae 3.0% coupon improving by 50 basis points by end of the day – for some loan programs that would mean .125% improvement in rate compared to Thursday’s close. In fact after 3 weeks of consecutive increase the mortgage rates improved last week. Freddie Mac in its Primary Mortgage Market Survey announced that the 30 Year Fixed Mortgage Rates (for loan amounts under $417k) averaged 3.59% with 0.6 points compared to 3.66% a week back.
The quantitative easing may help improve California mortgage rates slightly more. Next week is critical since most of the impact will be seen over next few days. Since the rates are already at some of the lowest level in the year (and in the History), we dont expect any substantial improvements, but a minor improvement is not ruled out.
If you are shopping for mortgage rates and/or considering refinancing in California, Washington and Oregon – give us a call and find out how we consistently beat bigger banks rate. And we also offer no points, no closing cost refinances. You can call me directly at (408) 615-0655 or email me [email protected]