Mortgage rate rises to 4.46%

Mortgage rate rises to 4.46%According to the latest data released, the average of a 30-year fixed home loan rose from 3.93 per cent to 4.46 per cent, recording its biggest increase in the Freddie Mac survey since 1987 due to concerns that the US Federal Reserve is set to roll back its stimulus package.

The Federal Reserve officials are trying to calm the situation by convincing investors that the Federal Reserve will not suddenly withdraw stimulus package that has helped the US economy survive the financial crisis by keeping the borrowing costs low. The reserve will continue to provide stimulus to support the recovery of the economy but has indicated that it will begin a gradual roll back.

The Freddie Mac's latest survey of lenders showed that the average rate for a 30-year fixed home loan had rose to 4.46 per cent during the previous week while the benchmark 30-year rate is up more than 1 percentage point. Experts have said that the rise will smoothen a long boom in mortgage refinancing and control rising prices.

Investors have expressed concerns over the cut back to the quantitative easing program. Some believe that the Fed's bond-buying program might be rolled back by the officials. Influential officials from within and outside the Federal Reserve are now increasing opposing the stimulus and the Federal Reserve might face pressure to cut back on the expenses to stabilize the country's balance sheet with a direct impact on the Federal Reserve's bond-buying plans.