But worrisome economic news and a plunge in stocks has counter balanced the Fed action, according to Keith Gumbinger of HSH.com, a mortgage information company. Anxious investors have scurried to safe havens like treasury bonds and mortgage backed securities.
"Much to the benefit of mortgage shoppers, this move [to bonds] is dragging down yields and mortgage rates," said Gumbinger. "This is a nice surprise" for people looking to purchase or refinance their homes in a rising rates environment, he said.
Rates may keep dropping, according to Gumbinger.
"The reduction in Fed support, slowing manufacturing activity here and in China, some less-than-stellar figures on consumer spending, housing, and more are causing some concern that the economy has decelerated over the last couple of months," he said. "The economy doesn't need to slow very much to put us back into the kind of funk we've been hoping to escape since the recovery began several years ago."