Late to the party but better late than never, the Federal Reserve announced yesterday that they were purchasing up to $600 billion in mortgage related debt, $500 billion going towards “direct obligations” in government sponsored enterprises (GSE) and mortgage backed securities (MBS) from Fannie Mae, Freddie Mac and Ginne Mae. This is widely seen as the first time that the Fed has tried to influence mortgage rates.
What this means for Twin Cities Home Buyers
Interest rates plummeted to lows that we haven’t seen in awhile. If this works and who knows if it will with the Fed buying up MBS, we might see lower interest rates. Twin Cities home buyers should have more buying power in thanks to mortgage rates dropping to 5.5%.
If you can afford to and have a higher interest rate, keep watching interest rates to see what they do. You may want to think about refinancing if you need to with an adjustable rate mortgage.
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