Interest Rates Expected to Climb

It look as though interest rates are expected to start their climb late spring.  The Federal Reserve commitment of buying mortgage-backed securities ends on March 31, 2010.  Originally the Fed committed to purchase $1.25 trillion in Fannie Mae and Freddie Mac securities about 18 months ago to keep liquidity in the market.    This was done so Fannie and Freddie would continue to buy conforming loans.  Several economists agree that it will raise up at least 30 basis points and that rates are likely to go up regardless due to inflation and the slow growth of the economy.

This combined with the expiration of the home buyer tax credits should make for an interesting April as buyer scramble to take advantage of the credits and lower rates.

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