A few weeks ago when the Federal Reserve began buying millions of dollars worth of treasury bills the primary goal was thought to be a revival in the mortgage sector. The Federal Reserve knew that by purchasing so much money in the treasury market it would force mortgage rates lower, which it hoped would cause some increased activity in the mortgage area that has been hit so hard in the last few quarters.

While it has just been a little over three weeks since the plan was announced the Federal Reserve’s plan seems to be working quite well. There have been some very encouraging signs in the mortgage sector in the past few weeks that probably couldn’t have occurred if it weren’t for the strong actions taken by the Fed in the last few months. In the past few weeks mortgage rates have plunged to some of their lowest levels in the past 30 years, and it seems that consumers have paid close attention to that drop in rates. According to the Mortgage Bankers Association applications for refinancing are up 129% since the end of February, which is not a bit surprising. Even more encouraging though is the fact that applications for home purchases were up 22% in the same time period. While it is true that refinancing their mortgage is the first thing on many people’s minds, home owners are also beginning to come out of the wood work, which is great news for the overall economy.

Just yesterday Wells Fargo became the first major bank to give us some hard data to show that the mortgage resurgence is actually making a huge difference to their bottom line. In fact the company pre-announced record profits that shocked the street and helped stocks finish a shortened week up in a big way.

These are all very short-term findings so there certainly needs to be continued strength before too much is read into these data points, but it certainly is nice to see some encouraging news from the mortgage sector!