30 year conforming rates will be down by at least 1/8 of a point tomorrow on average. Take a look at what happened to the Freddie Mac RNY (basically their required rate to purchase a loan) when the Fed Funds Rate dropped.
At 2PM, before the Fed announcement the rate for a 60 day lock was 6.19%, at the close today after the Fed announcement the rate was 6.03%.
Still anyones guess on what will happen to Jumbo loans but I would expect them to ease by at least 1/8 as well. In the past I haven’t seen a shift in rates like this without a corresponding move down in the 10 year treasury yield. So this reinforces what I posted earlier, that long term mortgage rates may still come down due improved liquidity reducing the historically high premiums on long term mortgage rates relative to treasury yields
For more discussion of this topic, see my original post a few weeks ago at:
