Another Fed Member in Favor of Higher Mortgage Rates

A second Fed voting member, Chris Walter, last week said that the housing market is on fire and doesn’t need any unnecessary support from the Fed with lower mortgage rates and he would be in favor of reducing their purchases of mortgage bonds this year. This is a sign that mortgage rates will be increasing later this year and I am surprised that they haven’t yet. I bet it’s because the Fed is buying much more than their stated $40 billion a month. As an industry we are closing about $250 billion a month in new mortgages and I bet the Fed is buying more than half of these new bonds.

This is reason #2 why any potential home buyer should NOT wait to buy a home in metro Denver. And remember a 1% rate increase is equal to a 11% price increase. The first reason is the Summer Slowdown we are experiencing like we do every year.