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Mortgage Interest Rates – Where Do We Go From Here?

By Kevin Landis

With interest rates so low, many are asking where the market will go from here. Mortgage interest rates are the lowest they have been, by comparison, in nearly 50 years. It is hard to believe, or expect, that they will go any lower. The general opinion is that the mortgage interest rates will remain low for a time, but as the economy recovers, so will the rates. As the Federal Reserve begins to raise interest rates, the rates on mortgages will begin to rise again. There are no guarantees how this market will work or when the changes will take place. The safest bet is to apply for a mortgage now, when mortgage interest rates are so low.

What Decides Mortgage Interest Rates?

Mortgage interest rates are based on many factors. One way to guess what the rates will be is to look at Ten year government treasury bonds. Mortgage interest rates are often based off of the rates bonds receive, plus an additional percentage. For example, if the current rates for a t-bill are 2.7% you can expect to pay about 4% on a mortgage. Other factors such as housing inventories, unemployment and associated financial data will also have an impact on the mortgage market.

Will Mortgage Interest Rates Ever Be This Low Again?

While consumers can only hope that mortgage rates remain this low, on the wide view of the economy, it is impossible for them to remain this low for long. As the economy improves, rates will increase because there will be more money flowing on the market. This is good for everyone; even though it seems odd that higher interest equals good economy.

Related posts:

1. How Will Low Mortgage Rates Affect The Housing Demand?
2. How Do Market Conditions Affect Mortgage Interest Rates?
3. In What Way Do Market Conditions Affect Mortgage Interest Rates?
4. Why Causes Changes in Mortgage Interest Rates?
5. Are We In An Economy Where Low Mortgage Rates Don’t Matter?