Mortgage Rates in 2012

The Federal Reserve launched QE3 in September — an open-ended, unlimited MBS purchase program ($40B/month). This "whatever it takes" approach drove mortgage rates to new record lows. The Fed also introduced explicit calendar guidance (near-zero rates through "at least mid-2015").

CPI rose only 2.1% — near the Fed's 2% target. Low oil prices and weak wage growth kept inflation well-behaved, giving the Fed unlimited room to ease.

Mortgage rates hit a new record low of 3.66% for the full year. The housing market finally turned — prices rose 5–10% nationally. Refinancing activity hit a multi-year peak. Housing became a GDP growth driver for the first time since 2006.