Mortgage rates for 2013 have been rising sharply.
As previously reported by The Inquisitr, mortgage rates were at an all-time low in the fall of 2012 due to fears over the fiscal cliff.
In recent years mortgage rates for a 30-year fixed loan were at 3.31 percent, the lowest on records dating to 1971. The average on the 15-year fixed mortgage were as low as 2.63 percent, also a record low.
Federal Reserve Chairman Ben Bernanke has been keeping mortgage rates low by pumping $85 billion per month into the system through what is called quantitative easing, or QE. But mortgage rates started rising sharply after Bernanke commented on May 3 that the Fed might begin to taper off the QE program.
30 year fixed mortgage rates are now at 4.12 percent, down from a recent high of 4.14 percent. It’s only been a short time since mortgage rates were hovering around 3.5 percent.
The reason for the mortgage rates pullback is the announcement that the Fed “will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially.”
So far they are tentatively scheduling an end to the QE program by mid-2014.
John Walsh, president of Total Mortgage Services, claims Bernanke will only end the QE program if the economy improves:
“I think the Fed is doing a test run to see how the market reacts. We are not on really firm footing at this point yet. We are still in a fragile spot with the economy, and the jobs market is still not great.”
With mortgage rates still relatively low, will you buy a house before the Fed ends the QE gravy train?