Real Estate Pro Articles
   
   

Feds End Securities Buying Program and Interest Rates Remain Stable



[Valid RSS feed]  Category Rss Feed - http://www.realestateproarticles.com/rss.php?rss=266
By : Paul Escobedo    99 or more times read
With the expiration of the Federal Reserve's $1.25 trillion mortgage backed securities purchase program, there has been speculation that the termination of this program would cause traditional 30 year fixed rate mortgage interest rates to rise. So far the market does not seem to be diversely effected.

A key index that is used to measure the volatility of interest rates shows that there have been no major fluctuations. Market analysts measure the spread between the yield on 10 year Treasury notes and federal interest rates. Back in November 2008 when the housing crisis was at its peek the spread between these two benchmarks were 2.29%. It took an intervention by the feds to return the gap to traditional levels. The normal difference between 10 Treasury yields and federal interest rates is 1 percentage point. This single percentage point represents a stable market. Over the past couple of months the gap has remained stable between 0.6 and 0.7 of a percentage point. In the early part of March 2010 the gap was reduced to a record low of 0.59.

There has been a lot of anticipation and fear regarding the expiration of the feds securities buying program and its affect on the market; it appears most of those fears are unfounded. The feds took into consideration that the immediate termination of its buying program may cause issues in an already volatile market, so they have slowly been winding down the program since December. During this stepping down process private investors have been picking up the slack in the market. There are some fears that the amount of government guaranteed paper on the market might cause borrowing costs to increase.
New Homes Section is a leading resource for home buyers searching for new homes, home builders, green housing information and construction news. Stop by New HomesSection.com today.

Warning: include(): http:// wrapper is disabled in the server configuration by allow_url_include=0 in /home/onlineb1/public_html/realestateproarticles/articledetail.php on line 105

Warning: include(http://www.realestateproarticles.com/catads/nas468x60cat266.php): failed to open stream: no suitable wrapper could be found in /home/onlineb1/public_html/realestateproarticles/articledetail.php on line 105

Warning: include(): Failed opening 'http://www.realestateproarticles.com/catads/nas468x60cat266.php' for inclusion (include_path='.:/usr/local/php56/pear') in /home/onlineb1/public_html/realestateproarticles/articledetail.php on line 105

Related Articles



Actions
Print This Article
Add To Favorites



Sponsors

 

 

© All rights reserved to Real Estate Pro Articles