Are Mortgage Rates At A Bottom?

Some including myself think so.  The reason behind my thinking is that the Fed has cut back on buying mortgage-backed securities to every other week even though they extended the purchase program from October to the end of the 1st quarter of 2010.  As the economy improves and inflation kicks in, it is inevitable that they will raise and they will raise fast.  No one really knows for sure when this will happen but I found this part of the article to be very interesting.

“With the government now subsidizing risk by buying mortgage-backed securities and keeping rates low, buyers are almost demanding the lower rates,” says Jesse Keenan, adjunct professor of housing law at the University of Miami.

But some analysts says a rise in rates could force some would-be home buyers off the fence—as has happened in the past.

“Higher rates will force people to buy,” says David Dessner, director of sales at Guardhill Financial, a mortgage broker firm in Manhattan. “People will see current rates as historically low and see rising rates as a time to buy, thinking that rates will keep rising once they start up.”