Ending Fed buying of mortgage backed securities could raise rates 0.35%

A few days ago I posted, “Could interest rates increase 0.75% in January?” on what might happen if the Fed’s mortgage buying program ends on December 31 as scheduled.

Recently, Calculated Risk looked at the impact of Fed buying mortgage backed securities on mortgage rates. They estimated that the program lowered interest rates about 0.35%.

So we have two estimates now – if the program ends December 31, it could increase interest rates 0.35% or 0.75%.

If you know anything about this issue, I would love to hear about it in the comments.

September 19, 2009 by Realtor John Wake

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John Wake

Born in Phoenix, trained as an economist and now a licensed Realtor, John uses hard data from the real estate market to help his clients -- buyers and sellers of residential real estate -- uncover their best choices for finding the right home or finding a buyer for their current home.

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