Balancing Mortgage Rates, Real Estate Values, and Inflation
The Federal Reserve is scheduled to complete its purchase of $1.25 trillion of mortgage-backed securities in March. The program has maintained low mortgage rates after the real estate bubble burst.
The Fed’s balance sheet has more than doubled since the financial crisis, and bond investors, among others, fear too much money will eventually get into other sectors of the economy, which could fuel inflation.
Fed officials and private economists have differing views on what might happen after the mortgage-backed securities purchase program has ended. Some officials are worried that a rise in mortgage rates may threaten fragile real estate values. The purchase program could be re-instated if mortgage rates were to increase substantially.
Despite some news of stabilizing home sales and prices, Fed policymakers are also concerned about the risk of more foreclosures and the wind-down of the government's home buyer tax credit program.
Mortgage Rates and Information
The Fed’s balance sheet has more than doubled since the financial crisis, and bond investors, among others, fear too much money will eventually get into other sectors of the economy, which could fuel inflation.
Fed officials and private economists have differing views on what might happen after the mortgage-backed securities purchase program has ended. Some officials are worried that a rise in mortgage rates may threaten fragile real estate values. The purchase program could be re-instated if mortgage rates were to increase substantially.
Despite some news of stabilizing home sales and prices, Fed policymakers are also concerned about the risk of more foreclosures and the wind-down of the government's home buyer tax credit program.
Mortgage Rates and Information
posted by CRHOME.com at
6:29 AM
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