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Fed Cut Could Push Mortgage Rates Below 3%

Mortgage News > Fed Cut Could Push Mortgage Rates Below 3%
Date: 03/03/2020    Fed Cut Could Push Mortgage Rates Below 3%

In response to economic distress from the Corona Virus, the Federal Reserve lowered its target rate today by a half point to a range of 1% - 1.25%. That drop led to 10-year Treasury yields falling below 1% for the first time ever. Since mortgage rates typically follow 10-year Treasuries, rates on 30-year fixed-rate mortgages – currently averaging around 3.45% - could potentially drop under 3%. Of course, 1.5% to 2% of any mortgage rate is made up of servicer fees and risk assessment for the secondary market so the spread between Treasuries and mortgage rates may also begin to widen.

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