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Interest Rates Likely to Be Impacted by Economic News

Posted by: RateAPY Bank Rates News
February 23rd, 2010

The Feds have started to raise interest rates and much of the stimulus used to boost the economy is coming to an end. Interest rates on everything from mortgages to certificates of deposit will likely go up.

Economic Questions as Stimulus Programs End

The Case-Shiller 20 city home price index was down 2.5% in Q4 and 3.1% year over year. Economists were expecting the numbers to be bad, so this report was not a surprise. There are some areas of the country that are doing well, including Dallas, San Francisco, and Washington, DC.

In the next couple of months, the Feds will likely stop buying mortgage backed securities (MBS) which analysts believe will cause mortgage rates to rise. The first time home buyer $8,000 tax credit also ends. Both of these government programs have been a huge support to the housing numbers. Which makes you wonder, if the numbers are this bad, how bad would they have been without the stimulus? And, how will they look by summer when the stimulus is gone?