Last year, mortgage rates rose substantially, hurting banks JPMorgan Chase (NYSE: JPM ) , Wells Fargo (NYSE: WFC ) , and other mortgage lenders. But now, they've started falling again. What's happening and why?
In this following video, Dan Caplinger, The Motley Fool's director of investment planning, discusses the latest trends in mortgage rates. Dan notes that the Federal Reserve has been buying mortgage-backed bonds to keep rates down, but this year, the Fed has been reducing its purchases under quantitative easing. Last year, the threat of Fed tapering sent rates soaring, but this year, the expected further increases in mortgage rates hasn't happened. In fact, mortgage rates are down a quarter percentage point. Dan points out that rates are still well above their lows from last year, but he concludes that they're still attractively low compared with historical levels.
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