Since the beginning of 2009 the Fed has been buying mortgaged backed securities, a total of $1.25 trillion has been spent, in order to keep mortgage rates low for buyers and re-finances. The program has worked really well, rates have been in the 4% to low 5% range for months and months. The Fed announced that it would be ending the program, and many economists and mortgage experts predicted that rates would jump up immediately because there wouldn't be any private investors buying the mortgage backed securities. Luckily, those private investors are starting to feel confidence in the market and have stepped up, and rates have remained basically the same, only up 1/4 to1/2%. Compared to the estimates of 6-7% rates, 5.25% isn't bad at all.
Read more from the
New York Times.
No comments:
Post a Comment