Buying Spree Ends, Are Mortgage Rates Going Up?

It was announced by the Federal Reserve at the conclusion of their 2 day meeting on Wed March 27 that they will end it's bond buying by June of this year. Fed Chairman Ben Bernanke says although the central bank’s second targeted initiative for pumping money into the economy will cease in June, its end is “unlikely to have a significant effect” on mortgage rates – or the broader economic recovery as a whole.

There has been concern that once it stops that a steep jump in mortgage rates could result.  However, when the first buying spree ended last March the mortgage rate increase forecast never materialized. Fed Chairman Bernanke says the market can expect the same non-event.

As the low mortgage rates are a great benefit in the stressed housing market let us all hope that Chairman Bernanke is hitting this nail on the head.