Rates Hit New Low After QE2 Announcement

Rates Hit New Low After QE2 Announcement

Reacting to the Fed’s QE2 announcement, interest rates responded by setting new lows. The 30-year fixed rate dropped to 4.17, down from 4.24% last week. The 15-year fixed rate also set a new low at 3.57% down from 3.63% the previous week. The 30-year is down significantly from last year’s 4.91%.
This new low should cause a boost in refinance activity and even some purchases as consumers make year end moves. This year end spike could lead us to some decent home sales numbers at a time the worst in housing price declines are yet to come. The Fed’s QE2 shouldn’t cause rates to fall much further, but we are close to testing 4%. If rates fall below 4% that could create a large burst in purchase activity.

The year end will look great if we reach a 4% rate. Let's keep our fingers crossed that we will have a buying frenzies.