The buying spree is over…now what?
With the recent softness
in the housing market, the end of the Federal Reserve’s mortgage-backed
securities (MBS) purchase program has fueled concerns that mortgage rates could
rise sharply and choke off prospects of a housing market recovery. The program
only ended last week and rates climbed to their highest point since August 2009.
Still, it is a little too early to connect the dots between these two events
and assume mortgage rates are headed to 10 percent by the end of the year. Mortgage
rates are affected by several factors, with yields on 10 year Treasury bonds
serving as a key driving force. Absent some kind of explosion in the bond
market mortgage rates should only increase gradually over the course of 2010.
04-09-2010 10:17 PM