From Ted Gosnell, Integrity Home Mortgage……
The Party is over! Mortgage rates are on the rise!
According to Janet Yellen, the chairperson of the Federal Reserve, the Fed will begin to reduce their purchases of mortgage-backed securities (MBS) and will in fact begin selling the ones currently held in their portfolio. This means private investors must begin buying a larger portion of these MBS instruments and the private sector won’t be required by Federal Mandate to accept such low yields as the Fed was and therefore mortgage rates are probably going to begin to rise. The Federal Reserve currently owns roughly one third of all outstanding mortgages in the United States and as they begin to reduce their MBS holdings, mortgage rates are likely to rise.
Additionally most investors had felt confident that we wouldn’t see another Fed rate hike this year; yesterday Janet Yellen pretty much said “WRONG” and continued by also saying, not only would we probably see another rate hike in December, but we’d probably also see at least three rate hikes next year.