Mortgage rates quickly fell after Fed's announcement Wednesday that it would come back in bond buying, the big time – which could take rates even lower.
Even small rate movements can have a major impact on k b of housing, especially since so many buyers today are facing overheated housing prices and therefore on the edge of being able to afford a home at all. Look at the 30-year fixed rate on a $ 300,000 mortgage, every 25 basis points move down means a $ 50 savings on a monthly payment. With the rate now down around 75 basis points from November, it is a $ 150 savings per month.
The drop in rates helps both potential buyers and current homeowners who might benefit from a refinancing – but it all comes with a warning. The Fed does not raise rates because the economy is weakening.
"While a plus for home buyers whose concerns about the economic outlook are shattering consumers and homebuyer confidence, it could offset t he benefits from lower mortgage rates," noted Danielle Hale, chief economist for realtor.com.