The MBA said the average 30 yr mortgage rate for the week ended Friday fell below 5% for the first time since late May, at 4.97%. In response, refi’s rose 17.4%, the highest since May while purchases were up 5.6%. This news comes as the FOMC discusses the fate of their purchases of MBS/Agency debt and Treasuries. They will reiterate that the buying of Treasuries will end in Oct as they are just about done with the $300b plan. The buying of MBS and agency debt will likely continue until year end. As of Sept 16th, they have purchased a combined $810b of the $1.45t that is planned. Combining low rates, cheaper homes and the home buying tax credit, housing in certain areas has caught a bid so the question of course is what happens when the Fed is done buying MBS and whether the tax credit gets extended past Nov 30th. ABC confidence rose 3 points to -46. The Euro Zone manufacturing and services index rose a touch to 50.8 but was .5 point less than expected.