Industry NewsMortgage

Rates below 5% before Fed action

Long-term impact remains the $1.25 trillion question

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Rates on 30-year fixed-rate mortgages dropped below 5 percent this week, according to a survey of lenders taken before Wednesday's announcement that the Federal Reserve plans to buy up to $1.25 trillion in mortgage-backed securities this year. At 4.98 percent with an average of 0.7 point, the 30-year fixed-rate mortgage (FRM) has not been lower since Jan. 15, when it hit an all-time low of 4.96 percent, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey. At this time last year, the 30-year FRM averaged 5.87 percent. Although the Fed's announcement was widely expected to bring mortgage rates down further, it's unclear if lenders will pass all of the savings they could achieve through lower borrowing costs to consumers, or if long-term rates will rebound if inflation sets in. The best wholesale rate available to mortgage brokers on 30-year fixed-rate loans fell from 4.811 percent Wednesday to 4.502 percent today, according to data compiled by Ja...