Ouch

Doesn't the fed dropping the rate only directly hit equity lines and not regular mortgages. I thought regular mortgages were tied to the 10 yr TBill.

 

I have no clue. Still learning all this. What I do find interesting is that the market seems to be ignoring DC and doing what they do best.

 

Rate adjustments will probably cause ARM movement which will help. You mention markets ignoring DC but it should be the other way around. BTW, don't think the markets ignored DC yesterday. What was it, like a 500 point swing?

 

The way that I understand it, the mortgage rates are not technically linked to anything, but will generally follow prime up or down a little.

I do know that the spread between either prime or mortgage rates (can't remember which) and the 10 year treasury is a very good leading indicator of a refi boom. Technically, we should already be in one right now, and volume is already picking up.

 

All I know for sure is that the 30 year fixed rate follows the 10 year TBill most of the time. Of course, the rate adjustments won't really help hybrid loan holders as many are unable to qualify for a conventional mortgage now.