Tuesday, September 7, 2010

The good news about rising mortgage rates

NEW YORK – Sept. 7, 2010 – The Mortgage Bankers Association’s upcoming data on mortgage-application activity might show whether the prospect of higher mortgage rates is spurring consumers to buy homes; mortgage rates tend to move in lock-step with bond yields, which suddenly rose by a significant amount on Friday.

Federal Reserve policy makers want to keep mortgage rates low to boost the economy and the housing market, and some observers believe they will introduce more policy-easing measures at their next meeting on Sept. 21.

Still, the Fed is unlikely to make hasty decisions, considering the central bank may be willing to live with risk that gets people to buy homes due to concerns that rates will rise even further.

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