Little has changed since we posted a rate update for Thursday, August 23 entitled Mortgage rates drop in the wake of poor jobs report, Fed minutes.
At the time, we wrote: “After several straight weeks of cost increases, rates have plummeted, in some cases by 3/4 of a point. Minutes from the Fed’s latest meetings reveal that the FOMC is concerned about the strength of the economy and is seriously considering another round of Quantitative Easing (QE3), a step that has been resisted thus far. The price of U.S. government debt rose, dropping the yield of the 10-year Treasury and bringing mortgage rates down with it.”
For several weeks, mortgage interest rates had moved off lows and rose in cost, as equities climbed upward and improved employment and housing numbers flooded the news cycle. The Fed’s gloomy outlook of the economy and possible implementation of QE3 alarmed investors, who then moved back to U.S. debt – viewed as the “safe haven” bet for the uncertain future. (For more on the future outlook of mortgage rates see our rundown HERE). For a complete update of mortgage rates to begin the week, you can see our post HERE.
The Dow rallied from its difficulties on Thursday with 100 point gains on Friday and then fell by 33 points on Monday, August 27 to begin the week. The yield of the 10-year Treasury (the historic 30-year mortgage rate tracker) fell by 0.0342 percent to 1.6534 percent.