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The Fed is going to stop buying bonds in October – that should give the national media some more fodder to kick around during the dog days of summer!

They will be suggesting that mortgage rates will be rising soon!

A few thoughts:

1. The last time the Fed halted their QE a couple of years ago, mortgage rates went DOWN, due to private investment picking up the slack.

2. Other factors have an effect on rates. A good example is today’s news about Portugal which sent our 10-year treasury yields to 6-week lows:

10-year yield July 10th 2014

3.  Wars and elections tend to keep rates down – and both are brewing.

What will it mean for real estate?  Rates could certainly rise, and if they get close to 5% we can probably expect to pack it in until springtime.  Buyers will appreciate the break, and sellers aren’t that motivated anyway.

If rates stay where they are today (or maybe drop a little?), we could see a vibrant 3rd quarter and buyers feel a press to get ‘er done before rates potentially go up.  I don’t think rates will go up much if at all – the range has been pretty solid the last couple of months.

This is where I get my mortgage news:

http://www.mortgagenewsdaily.com/

Their ‘Daily Mortgage Rate Survey’ shows the zero-points rate, and yesterday’s was 4.18% – which is great.  Let’s see where it goes!

What do you think will happen to rates?

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