Mortgage rates just tanked thanks to the Fed – and they could go even lower.
Mortgage rates fell quickly after the Fed's announcement Wednesday that it would be getting back into the bond-buying business, big time – which could take rates even lower.
The move in mortgage rates followed Fed Chairman Jerome Powell's announcement that the central bank would end the so-called runoff of bonds from its balance sheet sooner than most expected. That caused the yield on the 10-year Treasury to tumble. Mortgage rates loosely follow that yield. Even small rate moves can have a big impact on homebuying, especially since so many buyers today are facing overheated home prices and are therefore on the edge of being able to afford a home at all. Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment. With the rate now down about 75 basis points from November, that's a savings of $150 per month.
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