MBS: Fed interventions help drive down primary mortgage rates
admin | March 27, 2020
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Federal Reserve purchases of more than $200 billion in MBS for the week ending March 25 have helped drive mortgage rates sharply lower. The average 30-year fixed-rate mortgage rate fell to 3.50%, 15 bp lower than the prior week, according to Freddie Mac’s weekly survey of mortgage rates. The survey was conducted from Monday March 23 through Wednesday March 25. Rates for 15-year fixed-rate mortgages dropped 14 bp, while 5-year Treasury-indexed hybrid ARM rates increased 23 bp. Mortgage rates had increased the two weeks prior to the Fed’s recent actions, partly from wider spreads in the MBS market. Most of the drop in primary rates came from lower yields on MBS. The spread between MBS yields and the average conventional rate available to borrowers is still highly elevated at around 180 bp. The Freddie Mac release is here. Source: Freddie Mac, APS.
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