4.5% Seriously, yes, I am serious

A couple of weeks ago, when I first heard of this so-called idea for the treasury to buy Mortgage Backed Securities to drop the rate.  I was unsure what to think of it, but as my phone starts to ring more and more.  I am liking it. We are not there yet to 4.5% interest rate, and I am not sure if we will be.

However, I think there has been some sort of “self-fulfilling” prophecy.  Investors are running in droves from the unsteady stock market to more safer bond market.  Now, if you are just some average Joe LO and you still think the 10 year T-bill controls mortgage rates…just please stop reading now.  Mortgage backed securities control the interest rates on mortgages.  But, when investors flee the stock market they head to higher safer ground of either MBS or the treasuries.

I read an article last week in the paper that investors were investing heavily in T-bills that were giving 0% rate.  Yes, ZERO, Nada, Zilch return, but we backed by the full faith of the United States Gov’t.  So, essentially the trusted safety of either a mason jar in your back yard or the gov’t.  Those were investors choices last week.  Still some ran to the mortgage backed securities and that has driven the mortgage rates to lows that have not seen in years.

I am not sure if this pricing will hold up, it looks like it might, but I would jump on it while you can.  Talk to your Mortgage Professional or talk to one of my pros.  But, please stay from the Average Joe LO that is watching the T-bills for morgage rates…he is an idiot