Mortgage Rates Rise in Response to Wind-Down of Federal Support

2009 saw historically low mortgage rates.  Early last year, the Federal Reserve announced plans to purchase debt and mortgage-backed securities from Fannie Mae and Freddie Mac to lower interest rates for consumers and spur homebuying.  As a result, rates on 30-year, fixed mortgages fell to historic lows. 2010 rates are expected to rise because the Fed’s asset purchase program is scheduled to expire at the end of the first quarter of 2010, and a lack of private demand for mortgage-backed securities could lead to a rise…

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