The big concern this year will be what happens to interest rates. Mortgage interest rates started, and remained low for all of 2009 thanks the the Fed purchasing over $1 Trillion worth of Mortgage Backed Securities. As we near the end of this buying cycle it will be interesting to see if interest rates will remain low, or if they will head right back to levels in late 2008 before the Fed announced their plan?
The above chart illustrates where mortgage prices (prices low = rates high) were before the Feds announcement to purchase billions (later changed to over a trillion) of mortgage backed securities.
