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How Long Will Mortgage Rates Stay Low?

By Kevin Landis

How Long Will Mortgage Rates Stay Low? Read here for factors that could affect how long mortgage interest rates will remain low.

Mortgage interest rates are at the lowest point they’ve been at in years. While its hard to believe that rates will increase to levels they were once at, they are bound to increase in the future. There are several factors that affect how long mortgage rates will stay low.

Improving Economy

The first factor that could affect how long mortgage rates will stay low is an improving economy. As the economy improve, inflation will begin to set in naturally. To offset the risk of drastically rising inflation, the federal government will be forced to raise their interest rates. While they are not directly related, these governmental increases have historically had a strong impact on mortgage interest rates.

Government Investment

The second factor that could affect how long mortgage rates will stay low is governmental investment. One of the main reasons why mortgage interest rates are low is that the government has enticed Freddie Mac and Fannie Mae to keep the rates low. The government has sunk billions of dollars into these companies, but there is a good chance that the government will not do so in the future. If the government stops investing in these companies, mortgage interest rates could increase.

Supply and Demand

The third factor that could affect how long mortgage rates will stay low is supply and demand. Supply and demand is the largest factor of determining mortgage interest rates. If a lot of people try to get a mortgage, interest rates will increase. If nobody wants a mortgage, rates will decrease. In the future, if homeownership is suddenly considered an excellent investment again and many people apply for mortgages, there is a good chance that rates will increase.

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2. Will Mortgage Rates Drop Again?
3. What Causes Mortgage Interest Rates To Go Up And Down So Dramatically?
4. What Causes Home Mortgage Interest Rates To Fluctuate?
5. What Moves Mortgage Rates?