Down.

The government takeover of Fannie Mae and Freddie Mac made big news over the weekend. 

First, the takeover took place on a weekend.  Who knew government worked on weekends? 

Second, Wall Street has responded and mortgage rates have gone DOWN.  Why?

Because Fannie Mae and Freddie Mac are considered to be much stronger, now that they are under government control.  They were government entities before, just thinly veiled as such, but now they are considered much more stable, pushing rates down and lowering the cost to borrow.  And they fund so many of the nation's mortgages – about $6 TRILLION of the country's $12.1 trillion in outstanding mortgages – so confidence is critical.

Good news for homeowners.  Current homeowners – now would be a good time to refinance if it would save you 1/2 a point or more.  Folks looking to buy – consider locking in your rate if you'll be closing on a property within the next 60 days.  This could save thousands a year in payments.

Updated 9/10 – Dan Green has a great analysis of the situation.