The end of June was an unprecedented time in the mortgage market that brought about what seemed like a sudden and drastic hike in mortgage rates. Gina Spearman, a sales manager and licensed mortgage originator with Academy Mortgage, explains the reasons behind the rising rates.

The Federal Reserve announced on June 19 that they would be tapering off, and eventually ending, the program in which they were spending $85 billion a month buying mortgage-backed securities. The bond buying program, which has been going on for quite a while, has helped to hold interest rates to a steady, low rate. The Federal Reserve was printing money and purchasing bonds with the intention to spur the housing market and boost the economy. Now that the economy is slowly healing, they believe it is time to allow interest rates to rise to where they should be.

One important question that many people are now asking is how long the Reserve’s tapering will last, and how will it affect interest rates. Federal Reserve Chairman Ben Bernanke said they could begin winding down the program as early as the fourth quarter of this year, with the program completely ending sometime in mid-2014.

However, it is important to note that we have already seen what is expected to be the majority of the change in the market. Within the last six weeks, we have seen interest rates rise from 3.25 percent up to around 4.5 percent. It is important for homebuyers to realize that although we are currently seeing higher rates, average interest rates without government intervention are historically in the mid-5 percent range.

The bottom line for everyone to remember is that the current interest rates are still historically low, and they beat renting any day.

For more information on how to take advantage of low mortgage rates, call a loan officer at Academy Mortgage today at 404-558-4399 or

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