March 30, 2010
No More Federal Backup
After trillions of dollars spent in the mortgage market, the government has decided to take a step back. The Fed is a major buyer from this market that is still finding its way towards stability. This has left those who follow the mortgage market concerned about the future of the market. A major concern is that prices might fall and rates would dramatically increase.
The chart from Strategas Research Don Rissmiller shows us that the rates have remained stable since the Fed left the mortgage market.
Although there were individuals worried about the impact the government no longer backing the mortgage industry, there were others who believed that once the $1.25 trillion program ends, there will be potential investors eager to step in and take over the market.
