Rates have  been staying low since spring of 2009 thanks primarily to the intervention by the Federal Reserve. Rate predictions are as simple as weather predictions in my home town, Chicago. It does seem reasonable to suggest that rates will go up when the Feds wrap up their program of purchasing MBS (Mortgage Backed Securities) on March 31st. If you would like a rate quote for your next mortgage, contact David Wolsky at 520-529-7515 or david@davidwolsky.com.

Here’s an excerpt of an article on March 11th from BankRate.com. Keep in mind that rate surveys are reflecting the rates of the previous week and there are ebbs and flows to the market causing rate fluctuations.

Rates Fall to Lowest Point of this Young Year

The Fed is in the final three weeks of a mortgage-buying initiative that began more than a year ago. In all, the Fed plans to buy $1.25 trillion in mortgage-backed securities. The central bank is down to the last $30 billion or so of these purchases. Afterward, it will be up to investors to buy mortgages and keep home loans available. 

For a while, the consensus among bankers and economists was this: Mortgage rates would rise roughly half a percentage point after the Fed’s withdrawal. That consensus of an expectation of higher rates has transformed into uncertainty.

“Are we going to see a half-point blip? I don’t know. Maybe. Possibly. Probably. I don’t know,” says Dick Lepre, senior loan consultant for Residential Pacific Mortgage. If the Fed’s withdrawal means that rates are going to rise, why haven’t rates gone up already?

Even members of the Fed are asking that question, which implies that they are uncertain about the direction of mortgage rates, too. Brian Sack, executive vice president of the New York Fed, said in a speech Monday that the central bank has been tapering its purchases of mortgage-backed securities. “However, even as the pace of our purchases has slowed, longer-term interest rates have remained low,” Sack said, and the gap between mortgage rates and Treasury yields has remained narrow.

Click here to read the full article: http://www.bankrate.com/finance/mortgages/rates-fall-again-to-new-low.aspx

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