Mortgage rates stayed in the basement this week, as mortgage-backed securities that fund the vast majority of home loans continued to look like a safe bet to investors.
A weekly survey by the Mortgage Bankers Association showed demand for purchase mortgages was up a seasonally adjusted 1 percent during the week ending Oct. 26 when compared to the week before, and up 6 percent from the same week a year ago.
Members of the Federal Reserve’s Open Market Committee said last week they expect to keep their target for short-term interest rates at “exceptionally low levels” at least through mid-2015.
The Fed is also keeping mortgage rates low, by boosting purchases of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac by $40 billion a month. Economists at Fannie Mae think the open-ended program may continue through next year and into 2014.