Federal Reserve promises low interest rates

In what could be a surprising amount of help to the mortgage market, the Federal Reserve recently announced its intention to keep interest rates low over the next two years.

The announcement came after the United States was given a lowered credit rating by Standard and Poor's, which sent the stock market into a free fall earlier this week. In addition, other economic factors such as the poor job market and high unemployment fueled the decision.

"The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate," the statement said.

The promise of low interest rates helped buoy the stock market temporarily, according to The Los Angeles Times.

This could greatly affect not only mortgages, but a large part of loan activity across the United States. It also may help the slowly stabilizing residential housing market, which has been specifically depressed by poor economic conditions.