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A Look Ahead for Home Loan Rates - Key Stories to Watch Heading to 2014

The last quarter of 2013 is officially here, and it could prove to be another volatile one. As we head toward the new year, there are several key stories to monitor, as they could have a big impact on home loan rates.

 

To Taper or Not to Taper

One of the biggest headlines over the past year has been the Fed's decision to purchase $85 billion of Bonds a month to help stimulate the economy and housing market. This includes Mortgage Bonds, to which home loan rates are tied, and these purchases have helped home loan rates remain attractive.

The Fed has said the rate of its purchases will continue to depend on economic data, and could be increased or decreased accordingly. In its September meeting of the Federal Open Market Committee, the Fed decided not to taper its purchases due to recent economic reports that were worse than expected. Fed Chairman Ben Bernanke stated that tapering could "possibly" come later this year.


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