Mortgage rates predictions - what the charts tell us Mortgage rates have much to do with how the economy is performing. When mortgage rates rise, people can not afford to invest in new properties. This, of course, brings a slowdown in civil construction and it also means less money will be flowing through the economy.
On the other hand, when mortgage rates fall, more people are able to buy a house. The lower rates fall, the higher the income needed to buy a house. When the houses are purchased, the ornaments of the building, which stimulates the economy in many ways.
Remember high interest rates?
For 20 years we have seen double-digit mortgage rates. To return to the late 70s and early 80s, mortgage rates were double digit standard. It was not until about 1985 after the Reagan administration put an end to stagflation and the misery index that haunts the Carter years, as mortgage rates found the buoyancy of about 7%.
Since then, mortgage rates have fluctuated between 9% and about 5.5%. Overall, there has been a long stable interest rate that we have enjoyed in recent years.
Higher or lower?
Now the question is where interest rates from here. Reading the cards, we try to predict their future evolution, as if we were reading the tables produced to get a handle on which the average price of soybeans have been ruled. Then we'll make a prediction about another product that is sure to be shocking!
At that time, it is wise to make a warning. First, nobody can really predict the future and, secondly, in any case the world can change what the future now looks like a heartbeat. In addition, you can not ignore the fact that these unforeseen world events can occur unexpectedly. With that behind us, we'll take a look at the tables.
18 years
Throughout the 90s, interest rates on 30-year fixed-rate mortgages ranged between 9% and 7%. At the time, George W. Bush took office, the average mortgage rate of 30 years was 8.75%. From there, it attenuated the decrease steadily through the first term of George W. Bush. In fact, it reached a low of 4.75% in late 2003. Here, the interest rates ranged between 6.5% and 5.5% for the next 3 years. It was an environment exceptionally stable interest rates and it was one of the reasons why the housing market turned red hot, and yes, overbought.
In 2006, the trend was over 5.5% to 6.5%, but the rate has never been higher. Now interest rates are around six percent and a downward trend.
Reading charts
The technical operator, that is, one that merchandise trade by playing cards, would certainly believe interest rates because they are heading downward, would again test the low of 4.75%. It will be important to see if a double bottom is 4.75%. If this fund is made, interest rates will rise.
Because of market fundamentals, such as the Fed tries to lower interest rates to stimulate the housing market, it seems much more likely interest rates will break the low of 4.75% once they arrive. If they do, a new downward trend will be on the road. Just how much lower interest rates could have is anybody's guess. However, it is certainly not out of question that we might see 4% 30 year fixed mortgage rates for some time before this downward trend is ending.
4%!
Historically, 4% is a very low interest rates, but right now it really looks like we're much more likely to see 4% compared to more like 7%. So for what it's worth, is my prediction. We'll see interest rates on mortgages fixed 30 years somewhere around 4% before an inflationary aspect of the economy picks up.
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Posted on February 14, 2010.
