Click through the timeline below to see the effect the Fed's moves had on mortgage rates.
QE1: Nov. 25, 2008 - March 31, 2010
What the Fed did
- The Fed initiated purchases of $500 billion in mortgage-backed securities.
- It announced purchases of up to $100 billion in debt obligations of mortgage giants Fannie Mae, Freddie Mac, Ginnie Mae and Federal Home Loan Banks.
- The Fed cut the key interest rate to near zero, Dec. 16, 2008.
- In March 2009, the Fed expanded the mortgage buying program and said it would purchase $750 billion more in mortgage-backed securities.
- The Fed also announced it would invest another $100 billion in Fannie and Freddie debt and purchase up to $300 billion of longer-term Treasury securities over a period of six months.
- The quantitative easing program, or QE1, concluded in the first quarter of 2010, with a total of $1.25 trillion in purchases of mortgage-backed securities and $175 billion of agency debt purchases.
What was expected
The Fed wanted to lower mortgage interest rates and increase the availability of credit for homebuyers to help support the housing market and improve financial market conditions.
What happened
Mortgage rates dropped significantly, to as low as 5 percent, about a year after QE1 started.
How mortgage rates reacted during QE1
Note: Mortgage figures are from Bankrate's weekly national survey of large lenders.