The Federal Reserve’s plan for its mortgage portfolio is beginning to emerge. But for already nervous investors in mortgage-backed securities, what this will mean for the housing finance market is still murky.
Even before the minutes of the Fed’s last meeting revealed a discussion of the possibility of reducing its portfolio of mortgage bonds, mortgage rates were beginning to flirt with 5%. Freddie Mac’s latest weekly average of 30-year fixed mortgage rates, released Thursday, stood at 4.72%, up 0.05 percentage points from the previous week. Other surveys have had this rate a little closer to, and even above, the 5% mark.