Mortgage Rates Slip as Markets React to Fed’s Stimulus

Financial markets reacted to the ""Federal Reserve's"":http://www.federalreserve.gov/ announced stimulus last week, with investors dumping their money in more safe-haven Treasury debt, lowering mortgage rates accordingly.

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According to real estate website ""Zillow"":http://www.zillow.com/, which releases weekly surveys on the subject, the 30-year fixed-rate mortgage fell from 3.38 percent to 3.34 percent last week.

Rates for the 15-year home loan slid to 2.71 percent, while those for 5-year and 1-year adjustable-rate mortgages inched down to 2.45 percent.

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Mortgage rates plummeted across the country accordingly, falling by 10 basis points in New York and 9 basis points in both Florida and Illinois.

""Rates dropped this past week after the Federal Reserve announced a more aggressive stimulus plans than most anticipated,"" Erin Lantz, director of Zillow Mortgage Marketplace, said in a statement.

She explained that markets reacted largely to a more-than-expected delivery in Federal Reserve stimulus, which paired quantitative-easing with a pledge to keep federal funds ""close to zero"" through 2015.

""This combination of aggressive and unlimited stimulus programs drove rates down to near record lows, and although rates rebounded somewhat later in the week, they still remain significantly lower than prior weeks,"" she added.

Low interest rates have fueled home affordability rates since the onset of the financial crisis, with many, including those reported weekly by Bankrate.com and Freddie Mac, staying near record lows.

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