Mortgage Rates? - After the Fed Ends Support

The Fed today pledged to keep their key interest rates at the near-zero level. In the 'old' days this would likely signal that conventional mortgage rates would remain at their current low levels. However, the Fed also announced that they will stop purchasing mortgage backed securities at the end of March. Some analysts had thought that mortgage rates would likely spike when the Fed stops, but some now feel that any rate increases will be minor. Read the story on the CNBC website.... Here.

Mortgage Rate Increase To Be Minimal

Sometime in the near future the Fed will stop buying the much-maligned mortgage backed securities. Almost everyone agrees that the inevitable result will be an increase in the home mortgage interest rates, now hovering at the 5% level. Some feel that the increase will be in the 1% range (bringing the rates to the 6-ish % range). Others, including the linked article, say that the increase will be minimal, in the 0.1% to 0.15% range. Read the article on the Wall Street Journal's MarketWatch website.

Fed's Move to Lower Rates May Backfire

It's a classic example of the law of unintended consequences. Some experts feel that the Fed's move to lower mortgage rates in order to stimulate the economy via an improved housing market may not deliver the expected results. In fact, the vast majority of new mortgages are re-fi's which won't provide any real help to the housing market, since no homes are bought and sold. Go to the article on CNBC.com to the whole story.