Bankrate: Mortgage Rates Plunge

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The Federal Reserve's announcement yesterday that it would buy up to $500 billion of government-sponsored enterprise mortgage-backed securities sparked a drop in mortgage rates, Bankrate Inc. reports. Bankrate, which publishes a weekly survey of mortgage rates, says rates for 30-year, fixed-rate mortgages have fallen to as low as 5.25%; the previous week's survey saw a 30-year fixed-rate average of 6.33%.

Bob Walters, chief economist for Quicken Loans, told Bankrate that the lowered rate should "absolutely translate into increased home buying." The report also notes that the Fed's actions should benefit borrowers with adjustable-rate mortgages who are looking to refinance into fixed-rate products.

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