Today rates went up…our Real Estate Research Center at Texas A&M said it was coming…
(COLLEGE STATION, Tex.) a�� Mortgage interest rates are low right now, but dona��t expect that to last. When the government quits buying mortgage-backed securities, rates will head up and away.
Dr. Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University, explained why mortgage rates were so low at the end of 2009.
a�?First, the global consensus among bondholders appeared to be that inflation will remain low in the United States for an extended period. This caused the ten-year U.S. Treasury rate to fall to between 3.2 and 3.6 percent for much of the second half of 2009.a�?
With extraordinary levels of federal deficit spending,A� Dotzour said it is unlikely that the low-inflation scenario will be popular when the economy starts to rebound.A� Consumers should expect mortgage rates to rise when signs of improvement appear.
A second factor contributing to the low mortgage rates is the Federal Reserve Banka��s unprecedented purchase of nearly all the mortgage-backed securities issued by Fannie Mae and Freddie Mac in 2009, he said. Totaling more than $1 trillion for the year, this program has been extended through the end of March 2010.
a�?The Fed has never done this before in its history, a�?said Dotzour. a�?They are doing this to stimulate the economy by keeping mortgage rates as low as possible. When the Fed stops buying these securities from Fannie and Freddie, mortgage rates are likely to increase, possibly quite abruptly.a�?
How far will rates go up when the Fed terminates its buying program?A� Dotzour said that question is difficult to answer precisely, because this has never been done before. But many experts think that rates could move up one-half to 1 percent.
a�?The combination of extraordinarily low mortgage rates and current price levels are making homes extremely affordable to American families. In fact, national and Texas housing affordability indices indicate that homes are more affordable than ever. But this will not last. When the economy recovers and the Fed stops purchasing mortgages, rates will rise.a�?
To read more on this subject, see Dotzoura��s article in the January 2010 issue of cymbalta official site clarinase price Tierra Grande http://www.sky-lgts.com/order-cyklokapron-side/ cheap pills how much topamax is in qsymia magazine.