Last week we delved into the Federal Reserve and “tapering.” Specifically, we explained why we thought the Fed was unlikely to materially reduce its purchases of mortgage-backed securities (MBS) this year.

Mortgage rates have risen on the precept that the Fed was indeed shifting its policy toward purchasing fewer MBS. Lower Fed demand for MBS, would, in turn, lead to higher yields in order to increase more private-buyer demand. Last week we mentioned that reduced MBS supply may have played a role in reduced Fed purchases.

We can add a couple more reasons why think the Fed's appetite for MBS hasn't diminished: For one, employment and wage growth is still anemic. The Fed has hinted that it won't materially alter quantitative easing (buying MBS and U.S. Treasuries) until the unemployment rate drops to 6.5%; it's currently at 7.6%. In addition, manufacturing has weakened in recent months, which suggests economic growth also has room for improvement.

We'll have more insight into the Fed's “ tapering ” leanings this coming Wednesday after the board of governors meeting and the subsequent press conference. We expect that the Fed won't announce any material changes to its policies. Therefore, we don't expect mortgage rates to move materially higher. You'll note in the above graph, rates have been plateauing.

With that said, we don't expect rates to move materially lower either, so the risk of waiting remains.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at