Phones are ringing off the hook in many Florida mortgage company offices as Florida homeowners are eager to learn how low fixed rate mortgages have fallen.  The truth is they haven’t. 

When the Feds lowered the Discount and Fed Funds rate by 1.25% over the past two weeks it merely reduced the Prime Rate and the rates one receives on new credit cards or car loans.  Florida fixed interest rates are exactly where they were prior to the surprise first Fed drop on January 22nd.   The mortgage markets in the US are extremely volatile. 

The problem is that Bernanke and company are reacting to panic in the mortgage markets as financial stricken Fannie Mae and Freddie Mac issues coupled with continued declining market values have made matters worse and deepened fears of recession.

The fears brought on with conventional mortgage credit has made the spread between the conventional 30 year fixed rate mortgage and the defining 10 year treasury note to over 2%.  This has never happened.  So far the Feds have not affected the fixed rate mortgage markets and it seems financial fears will keep Florida mortgage rates at bay.