Mortgage rates have been very volatile this past month. If you’ve been paying attention, you’ll note that the Fed is trying to drive fixed-rate conventional loans down to a 4.5% rate. Last week, The Fed announced it would purchase mortgage-backed securities, in the open market, in order to drive down mortgage rates to 4.5%.
The preponderance of the Government intervention is being perceived as inflationary. In short, investors believe that the Government has created so much money in the past eighteen months that it could render our currency as worthless as a Banana Republic. This should drive mortgage rates much higher in 12-18 months. Continue reading this post