Fed Ends Its Purchasing of Mortgage Securities
Fears were not realized after the FED ended its purchasing of Mortgage Securities the end of March.
According to NC REALTORS Talk April 1st: The Federal Reserve’s single largest intervention to prop up the American economy, its $1.25 trillion program to buy mortgage-backed securities, came to a long-anticipated end March 31, 2010.
The program has been credited with holding mortgage interest rates at near-record lows and slowing the nationwide decline in home prices that threatened to send the economy into an extended slump.
The purchases caused rates for 30-year mortgages, which exceeded 6 percent in late 2008, to fall to below 5 percent by March 2009. They are hovering slightly above 5 percent today.
Economists had feared that mortgage interest rates would climb sharply after the 15-month program, but those fears have abated in recent weeks. Fed policy makers have suggested that they would consider resuming the purchases if conditions warranted it, but only as a last resort.
“Financial markets have improved considerably over the last year, and I am hopeful that mortgages will remain highly affordable even after our purchases cease,” Janet L. Yellen, the president of the Federal Reserve Bank of San Francisco, said in a speech on March 23. “Any significant run-up in mortgage rates would create risks for a housing recovery.”
Now is a great time to buy a home with the mortgage rates holding at an all time low and just a few weeks left on the extended tax credit ending April 30th. Don’t let this opportunity past – call a REALTOR today!
