Are current mortgage rates an un-expected gift? Most experts predicted that mortgages rates would go up when the Fed stopped buying Mortgage Backed Securities in April, but rates have not increased. Why?
The biggest reason there has not been the forecasted increase in rates has been the uncertainty of the European financial market, specifically, Greece and Portugal. Investors have been continuing to keep their money in the safety of the bond market which has kept mortgage rates low. As the European issue gets resolved, rates should naturally move higher.