Mortgage Rates remain low as we are experiencing record low rates partly due to Operation Twist, which I am record of criticizing. Operation Twist has been extended and the Treasury will continue to buy long term bonds in order to keep rates artificially low.
The reason I don’t agree with this is not that I don’t want to see low mortgage rates, but rather it that is another form of artificially propping up the housing market. I don’t believe the housing market needs this given the low inventory levels. Jobs is more of a factor to housing than interest rates. There will be a price we pay for Operation Twist down the road…
In the meantime, you might as well take advantage of these record low mortgage rates… The chart below shows how the 30 year Mortgage Rates trend with the 10 Year Treasury even though they are not directly tied together.