Why Haven’t Mortgage Rates Dropped?

Posted by Jeff on December 23, 2008 under Mortgage Info | Be the First to Comment

The Federal Reserve cut the Discount Rate but mortgage rates have barely improved.  The truth is the Fed has no control over mortgage rates.  Mortgage rates are a function of the bond market and fluctuate just like stock prices.  As investors buy and sell bonds, mortgage rates will change accordingly.  Sometimes they will change 2 or 3 times in a single day if the market is particularly active.

Investors are still worried about the safety of mortgage bonds so more investor money is going into government backed treasury bills and treasury bonds.  There is currently about a Read more of this article »