Home Loan Rates Move Below 5%

At the end of 2008, the Federal Reserve announced that it would buy over $500 billion in mortgage bonds over the first two quarters of 2009 in an effort to stimulate the housing market by lowering home loan rates. Earlier this week the Fed began purchasing mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae. The impact is beginning to hit.

Some of the nation's biggest banks--including J.P. Morgan Chase & Co. and Wells Fargo & Co. -- are offering 30-year fixed home loans under 5 percent, according to today's Realtor Magazine update. Last week's average home loan rates reflected the 10th straight decline in Freddie Mac's weekly survey.

Reports I receive from lenders indicate we will see rates fluctuate around the 5% level for the next several months during this Fed action.