Last week the Federal Reserve took aggressive action to reduce the cost of borrowing and spur lending activity throughout the economy.  The Fed, still reeling from a broken economy and lackluster credit market announced a massive plan to purchase long term treasury bonds and other mortgage backed securities – thereby dropping the rates associated with those assets.

30 year fixed rate mortgage quotes are hovering in the mid 4% range to 5%.  These are some of the lowest mortgage rates ever seen, and the goal would be to spur more lending, more home buying, more refinancing of home loans to help stabilize the real estate markets and put more cash in current homeowners pockets as they save money in interest expense.

This action has ballooned the mortgage refinancing activity over the last couple of weeks and provided many an opportunity to recognized real dollar benefits from taking advantage of the lower rates.

We’re also seeing signs of life as reports hit the wire yesterday that housing sales were up, housing starts were up, and while the median home price has dropped it’s still encouraging to see real activity in the largest component of the economic mess this country is in.

Loanexa Admin