Remember once again that the Fed’s $1.25 Trillion mortgage buying subsidy program is slated to end at the end of this month. Given that the Fed has been almost the only buyer of mortgages, we expected rates to start ticking up by now.
And we certainly expect them to shoot up after March 31st, if the Fed truly does pull out of the market. Whether the Fed does pull out or not remains to be seen. We think with the economy remaining so soft that the Fed’s support may be extended.
If the Fed does pull out, rates will have to shoot up significantly to entice private investors to buy mortgages or mortgage backed securities.
Our point, as always: Buy now and lock now while rates are so low.
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