Watch Mortgage Rates in the Month’s to Come

by Coldwell Banker Evergreen Olympic Realty, Inc. on April 1, 2010

Mortgage rates edged slightly higher this week, according to Freddie Mac’s weekly Primary Mortgage Market Survey. The average rate on a 30-year, fixed rate loan stands at 5.08%. Last week the rate was 4.99%. Average fees and points for the loan is 0.7%.

Yesterday, the Federal Reserve ended its year and a half long program of buying mortgage backed securities (MBS). That $1.25 trillion program manufactured demand for MBSs, which in turn has contributed to lower mortgage rates. It is unclear what impact the market will feel now that the program has concluded. Many experts agree that rates will begin to rise without this stimulus. Private investors are expected to demand higher yields on MBS, which will bring rates up.

With the exception of a brief spike last June, rates have been bouncing just above and below 5% for well over a year. This has been a period of remarkably stable rates. The Fed’s MBS program is a big reason for that.

For more on the MBS program see our related post on February 11, 2010 entitled Buyers are Acting While Rates are Low.

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