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Current Mortgage Rates Headed to 5%

Posted on | July 9, 2009 | 1 Comment

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Current mortgage rates have moved from 5.59% down to 5.2% in the last three weeks.  Average mortgage rates are likely to move even lower because the yield on the 10 year treasury rate has broken a major support level.  The purchasing of US Debt by the Federal Reserve Bank yesterday helped to push interest rates much lower.  For quite some time the government has talked about putting a cap on interest rates and it looks like that is exactly what they are doing.

Eventually, the Federal Reserve Bank is going to stop printing money at will, but no one really knows when that will happen.  Maybe when Ben Bernanke is ousted?  It sounds nice to have low mortgage rates now, but it is likely to cause hyperinflation in the very near future.  If the Fed continues to buy US debt with money from their printing press, all it is going to do is cause the value of the dollar decline even more.  It may seem like inflation is in the distant future, but it could happen sooner than you think.

As soon as our friends throughout the world realize that the United States is in financial trouble, we are going to see the treasury yields shoot up because no one is going to loan us money at rates around 3%.  That would be like giving someone with a 520 credit score a mortgage rate of 4.75%.  Basically, the United States is turning into a subprime borrower and when the lenders figure this out, we are going to be in big time trouble.  The major positive that the US does have is that we have been one of the strongest financial nations for a long time.  This is the exact reason we continue to get low interest rates on borrowed money.

Hopefully we can recover and get out of this recession before our lenders realize that this could last much longer than we think.  To compound matters, our Vice President comes out and mentions that they underestimated the severity of the financial crisis.  WOW!  Just what we needed to hear.  The leaders of our country underestimated the severity of the problems.  This is not good news for the future of this country!  Maybe Peter Schiff and Jim Rogers need to start giving President Obama economic advice.

Category: Low Mortgage Rates, current mortgage rates
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Comments

One Response to “Current Mortgage Rates Headed to 5%”

  1. Sam
    July 10th, 2009 @ 6:59 am

    Somebody needs to give them advice!

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