Click through the timeline below to see the effect the Fed's moves had on mortgage rates.
QE3: Sept. 13, 2012 to present
What the Fed did
- The Fed is planning to buy another $40 billion in mortgage-backed investments each month until the economy improves. That's on top of the tens of billions of dollars in mortgages it already had been buying each month, making U.S. banks flush with cash.
- The central bank continues to sell short-term bonds and use the money to buy long-term bonds.
- The time period during which the Fed will keep interest rates near zero was extended from the end of 2014 to mid-2015.
What was expected
QE3 was expected to hold rates down or reduce them on mortgages and other financial instruments. It was hoped that with a new cash injections, banks would lend out the money and give the economy a boost.
What happened
The 30-year and 15-year fixed-rate mortgages initially fell but have since bounced up and down.
How mortgage rates have reacted since the launch of QE3
Note: Mortgage figures are from Bankrate's weekly national survey of large lenders.