Continuation Of Fed Program Alters Rate Forecast

Federal efforts to support the ailing economy and strengthen the housing market began in 2009. The effects of these efforts have kept mortgage rates down and housing affordability high, resulting in a rebounding market and increasingly healthy economy. Because of this, expectations that the Federal Reserve would begin winding down its bond-buying program, have led to an increase in mortgage rates and forecasts of a coming economic slowdown. But, despite indicating the program would be cut back by the end of this year, the Fed recently announced it would continue the program and insisted there is no preset course or schedule for ending the purchases. Analysts expect that the continuation of the program will result in a break from the increases in mortgage rates seen over the past few months. More here and here.

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