You already know that what the Federal Reserve does with interest rates has a huge impact on the housing market. And as I wrote in my last column, interest rates are going up in the near future. This will make mortgages more expensive and will, in turn, decrease the amount you can afford to pay for a house.

But what you might not know is that the Fed influences housing prices in another significant way—through its purchasing of mortgage-backed securities (MBS)—and now the question is that when the Fed stop buying those securities in the near future, how will it affect the housing market?

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