ETF Trends
ETF Trends

A new Treasury plan to lower mortgage rates is getting some criticism, but the health of related exchange traded funds (ETFs) could change.

Mortgage rates could be falling to 4.5% if the plan goes through, but many feel that this will stem the bleeding for a short time, and let homebuilders stocks get ahead.

Although homebuilding stocks did have a rally, critics feel that the housing prices simply must come down, reports Aaron Task for Tech Ticker on Yahoo Finance.

The Treasury has the view that if rates are pushed downward for a loan to purchase a home in the United States, the market could get a revitalization. Falling housing prices and the glut of foreclosures are the undermining factors to address before an economic turnaround can occur, reports Deborah Soloman and Damian Paletta for The Wall Street Journal.

The plan is still in its infancy, but the major idea is to use the names of heavies such as Fannie Mae and Freddie Mac, and encourage banks to lend at 4.5%, one full percentage point lower than the standard. Borrowers have taken to the idea, as the number of refinance applications have nearly tripled.