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Mortgage Rate Limbo: 30-year FRM Hits New Low

by Chicago Agent

How low can mortgage rates go? Thirty-year rates on Freddie mortgages have now gone beyond the firm's record books.

The question lately regarding mortgages is, how low can mortgage rates go? In the case of the 30-year FRM, the answer is still pending.

After falling to a historical low of 4.09 percent, the 30-year rates have fallen yet again to the lowest level in Freddie Mac records to an incredible 4.01 percent. That’s a full percentage point drop from two years ago, and according to economist Paul Dales, they may drop even further.

Dales said that “Operation Twist,” the newest stimulus effort from the Federal Reserve that involves the Fed buying $400 billion of securities, could push treasury rates down and, as a result, mortgage rates.

“Mortgage rates have fallen some ways already, but they probably haven’t fully caught up with the decline in the 10-year Treasury,” Dales said. “It’s possible the effects of Operation Twist will drag 10-year yields down further, thereby weighing on mortgage rates more.”

Could 30-year rates drop below 4 percent?

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