Mortgage rates have steadied after a series of declines as a result of rate cuts by the Federal Reserve. With this came an influx of activity from buyers looking to take advantage of the opportunity, as well as folks looking to refinance for a better rate. The Fed announced that it would slash interest rates to zero but mortgage rates aren't likely to hit that mark.
"In and of itself, the Fed’s rate cut won’t cause mortgage rates to fall. Because mortgages are long-term loans, their interests rates tend to track long-term bond yields rather than short-term interest rates such as the federal funds rate," according to MarketWatch.
Though, the article also argues that the Fed's move to buy mortgage backed securities are likely to send mortgage rates lower that the historic points it reached in weeks past. However, the odds of rates reach that 0% point are slim to none.
What this does mean is mortgage rates will likely trend to new lows, resulting in a lot more activity and a busy period for brokers and loan originators. So, mortgage professionals could be looking at a record year in terms of volume if this activity persists for a longer period of time. They just won't be looking at zero percent mortgages.
To learn more about the current state of interest rates and mortgage rates, click here.