Mortgage Rates – August 12th Recap

What moved mortgage rates for August 12th

We’ll be posting more information on the Fed Policy Statement tomorrow.

In a nutshell, today’s information was somewhat positive. Bonds opened higher today which was a follow through of the Monday and Tuesday rally.  By mid-day and about one hour before the Fed announcement, bonds were suffering under a moderately bad 10 Year Treasury auction. The beginning of the end of these low rates was just one policy statement away.

After the Fed meeting, bonds dropped almost 75 basis points. What they say is always more important.  Mortgage bonds plummeted right after the Policy Statement and then recovered once the traders had read it.  It was actually pretty decent news.

The bad: Not much. For homeowners, your property values are rising.  For renters, we’re probably at, maybe past, the bottom.

The good: Expect moderated growth, the economy is in recovery mode (albeit slow), and the Fed will continue its $1,250,000,000,000 mortgage backed securities purchase program which should create a relatively low interest rate environment for a few weeks.