Housing starts up and mortgage rates may be too

The minutes revealed an upward revision to the Fed's forecast for economic growth and inflation in 2009 and 2010. In addition, Fed officials expressed a strong reluctance to increase the program to purchase mortgage-backed securities (MBS) any further. Mortgage rates are largely determined by MBS prices. When the Fed initially announced its MBS purchase program in November, mortgage rates immediately dropped, and they dropped again significantly when the Fed announced an increase in the program in March. The Fed has a substantial involvement in MBS markets, and any change in this program would have a major impact on mortgage rates.The housing sector data released during the week showed improvement. June Housing Starts rose 4% to the highest level in seven months. Building Permits, a leading indicator, jumped 9%. The national Association of Home Builders (NAHB) sentiment index increased to the highest level since September 2008. According to the NAHB, the first-time homebuyer tax credit, low mortgage rates, and "attractive" home prices are helping home sales. Per information from Federal Reserve and Marc Cohen Financial.