In 2012, the housing market got a boost from the long-term stability of mortgage rates. The Federal Reserve’s stimulus measures helped keep borrowing costs near record lows for much of last year, and through the first few months of 2012.
Low rates helped bring home buyers off the sidelines and into the market, driving home prices north across much of the country.
But mortgage rate trends shifted significantly in May 2013. That’s when Federal Reserve officials met for one of their Federal Open Market Committee (FOMC) meeting.
These meetings are a regular occurrence, taking place eight times a year. But the event that took place on May 1 sent waves through the stock market and the broader economy. That was when Fed officials said they could begin winding down their bond-buying stimulus program known as quantitative easing.
Shortly after that seemingly innocuous statement, the 10-year Treasury yield rose sharply. Mortgage…
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