Desperate times call for desperate measures. But, perhaps, having the GSEs create demand by purchasing (a lot) more of their own MBS in an effort to lower rates is a bridge too far.
The residential finance industry is hoping the Federal Reserve and/or the GSEs might come to the rescue by playing a role in driving down mortgage rates. How’s it looking, then? Not so good.
Mortgage rates remain stubbornly high by modern standards with the spread between the 10-year Treasury and MBS showing no mercy. Is there any hope on the horizon for a reprieve? Probably not.