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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. 

Posted 04-09-2010 10:17 PM by legob
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