Mortgage Rate Forecast – Mortgage Rates Trending Down in 2009

As many of my readers know, I am quite convinced that the long term mortgage rate forecast is down; possibly down to 4%.  The only way we will know how low mortgage rates will go is going to be determined by the economy.  It is quite a catch-22 as mortgage rates will continue to fall if the economy struggles into 2010.  If the economy starts to rebound and we see a stimulation of the economy, it is highly likely that mortgage rates will reverse trends and head higher.

I honestly feel that it is going to take more than a year to see any types of recovery in the current economic environment.  We continue to see new housing supply and unemployment rates increase.  This is the worst case scenario for the United States.  Not only are Americans losing their jobs, they are losing their homes as well.  If this continue, we will not see an economic recovery until late 2010 at the earliest.

With this knowledge, it is likely that the mortgage rate forecast is for rates to head all the way down to 4.0%.  I would be very surprised to see mortage rates go above 5% in the near future because the government will not let that happen.