Interest Rate History Shows Low Mortgage Rates Ahead
Posted on | July 13, 2009 | 2 Comments
When looking at interest rate history, it is hard to deny that low mortgage rates are ahead. Since 1982, when mortgage interest rates topped out at around 18% there has been as steady downward trend. There has been some bumps along the way including the mid 1990′s and then again in the late 1990s heading into 2000, but overall a downward trend in mortgage rates is what we have seen. From 2003 to about mid 2007, average mortgage rates went in a sideways motion but the housing market bubble has helped to continue the overall downtrend.
The chart above show what mortgage rates have looked like over the last 30 years. Obviously, since 2006 we have seen another leg down, but this is a great depiction of what mortgage rates have looked like in recent history. Notice what mortgage rates looked like in the late 1970s and early 1980s. This was the last time period in which inflation was rampant. This is very likely to happen again in the near future if the Federal Reserve Bank continues to print money at will.
The worry about inflation is a topic for another discussion, what we see in the near future is lower mortgage rates. Eventually this long downward trend will be broken to the upside but it does not look as if it is going to happen anytime soon. Every time the market maven predict that mortgage rates are heading above 6%, the Fed jumps in and gobbles up trillions of dollars in debt to force the 10 year yield and 30 year fixed rate mortgages lower.
Overall, interest rate history shows that low mortgage rates are definitely ahead of us. If you have been considering refinancing, now is the time to start doing the research so you will be ready when mortgage rates go below 5%. If you aren’t willing to take the risk of waiting, now is also a great time to get a refinance. There is nothing wrong with refinancing at a rate near 5%.
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July 13th, 2009 @ 9:42 pm
[...] financial time. Unfortunately, it is highly unlikely that you will be able to refinance at a much lower mortgage rate if you are on the verge of foreclosure. This does not mean that you do not have any [...]
July 15th, 2009 @ 7:39 am
[...] is a great article at Subprime Blogger about Interest Rate History. From the article: Overall, interest rate history shows that low mortgage rates are definitely [...]