What a difference a month makes. When Freddie Mac issued its monthly Economic and Housing Market Outlook on Dec. 9 it forecast interest rates, 4.61 percent at the time, would inch up slowly through 2011 to 5 percent by the end of the year. By the time the next forecast came out on Jan. 12, Freddie Mac’s economists had upgraded that prediction to an average rate of 5.1 percent for the second quarter of 2011 and 5.5 percent by the end of the year. The 30-year fixed-rate mortgage dropped to a historic low of 4.17 percent during the week ended Nov. 11 and then started to climb. While rates have backed off from the Dec. 30 level of 4.86 percent, they are expected to rise again and soon.

The year-end spike was due partially to the announcement by the Federal Reserve of a second round of qualitative easing known as QE2, under which the Fed will purchase some $600 billion in government bonds over an eight-month period.