Fed bows out -- what now for mortgage rates?
Hello, higher interest rates?
Maybe not, says Reuters. At least not right away. What one arm of the government taketh away, the other giveth back.
Fannie Mae and Freddie Mac, the mortgage financiers operating under federal conservatorship, will be buying out $200 billion in delinquent loans, putting "about $140 billion of cash into private investors' hands" for reinvestment into the market.
But Mark Zandi, chief economist at Moody's Economy.com, does expect that rates will go from the current 5 percent or so to over 5.5 percent by the end of the year.
Rates matter because they play a significant role in how much house buyers can afford -- and how much sellers can get. Low-low rates help increase home prices (i.e. the aughts housing boom), or at least remove a reason for them to fall faster.
Where do you see mortgage rates going?
Are you anxiously rate-watching because you're hoping to buy (or sell) soon?
And when do you think the government will actually scale back its involvement in the housing market?