THE FED WITHDRAWS
This week, the Federal Reserve ended a nearly 15-month-long, $1.25 trillion campaign of buying up mortgage-backed securities. The program's goal was to reduce borrowing costs for homebuyers.
The Fed's efforts appear to have paid off. When the Fed announced its campaign in November 2008, the average 30-year fixed-rate mortgage stood at 6.33%.
Rates have fallen steadily ever since, hovering near historic lows for many months. Now that the Federal Reserve is suspending its purchases, what will happen to mortgage rates?
Lepre says his "best guess" is that rates will rise a half-percent in the wake of the Fed's absence.
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