I received an email this morning which again predicted it was just a matter of time before rates go up again. The factor keeping rates at an unusual low for such an extended period is the Fed massive purchasing program of Mortgage Backed Securities. This is just about over. See the trend:
As you can see from this chart, the amounts of Mortgage Backed Securities is slowly dwindling. The program is set to wrap up by March 31st. About 95% of the allotment has been used of the $1.25 Trillion. This leaves about $66 billion left.
To grasp the signifigance, these funds purchased about 3 out of every 4 home loans during the past year. When such a large buyer stops buying, you can understand why there are predictions that the market will change and that that prices will worsen, or interest rates will go up.
(This information from Gulf Cost Mortgage Group, Baton Rouge, 225-753-7985)