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Where Are Mortgage Rates Headed In The Second Half 2010?

By Bob Redtree

The basic economics of the mortgage rates

Mortgage rates increase or decrease based on the same principles that the entire economy does. This means that they flow with the supply and demand of the market. Therefore, one can attempt to estimate where mortgage rates will be headed in the near future. Many want to know about where mortgage rates will be in the second half of 2010. While it can never be known for certain, there are some signs that rates will remain low.

The unemployment factor

The country is currently facing unemployment rates of around ten percent. This means that more and more people do not have extra income just lying around to purchase a home with. This means that there is much less pressure on the demand side of the equation. In order to try and balance this out, the mortgage lenders must try to keep rates low in order to try to draw in more customers.

Why will rates remain low for the rest of the year

You may agree with the basic idea of the supply versus demand explanation but still have questions about why this will mean low mortgage rates for the second half of 2010. The answer to this question is that unless the real economic dramatically improves in a short period of time (6 months), then the rates are not likely to rise quickly. These rates are a trailing factor anyway, meaning that they rise after the economy has. The overall economy usually does not do that dramatic of a recovery in that short of a period of time. This means that most likely rates will remain low for the remainder of the year 2010.

Related posts:

1. What Will Mortgage Interest Rates Do In 2010?
2. How Fast Will Mortgage Interest Rates Rise Now?
3. How Will Low Mortgage Rates Affect The Housing Demand?
4. When Do Mortgage Rates Change?
5. How Can I Pay Off My Mortgage In Half The Time?