The zero interest rate definitely does contribute, but a bigger deal for mortgage rates is that the Fed continues to buy $24-26 billion a month in mortgage-backed securities. It is keeping its total holdings of MBS constant, but since total holdings are still over $1.7 trillion, that results in a lot of purchases each month to cover the reduction in principal from people paying off mortgages in existing MBS.<p>This article has a good explaination: <a href="http:&#x2F;&#x2F;www.cnbc.com&#x2F;2015&#x2F;12&#x2F;16&#x2F;why-the-fed-move-doesnt-matter-to-mortgage-rates.html" rel="nofollow">http:&#x2F;&#x2F;www.cnbc.com&#x2F;2015&#x2F;12&#x2F;16&#x2F;why-the-fed-move-doesnt-matte...</a>