Mortgage rates are driven lower as the Fed held bond auctions to help lower the treasury yield to 3.289%. Many real estate professionals are hoping for a 4.5% target soon to revive stagnant housing market activities where home buyers get off the fence where they have been waiting for good opportunities.
Jumbo loans are following suit with lower interest rates to entice buyers as well.
With treasury yields increasing, the refinancing boom is not going to happen. Home prices continue to fall, and expected to level off in 2010.
When prices are dropping, few people are willing to spend $1.00 and end up with $0.90 in a few months.
Mortgage rates have improved to the low 5% range to help jump start the refinancing and housing markets. However, jumbo loans are 2% higher because of the higher risk. Underwriters are fearful of approving jumbo loans at the risk of losing their jobs.