Will rates be low forever?

I started my career back in 1991, nearly 30 years ago, when rates were roughly around 10 percent. We have seen rates below 6 percent since 2001, and the current run of low rates is unprecedented in modern history.

It’s been a good year for mortgages rates so far. Rates have been down as low as 3.99 percent recently for a 30-year fixed after being as high as 5 percent in November 2018. Then the housing market dwindled to a slow crawl, knocking rates back down again.

The mortgage interest market is in a very strange and unique position right now.

If we look at today’s unemployment, we are at 50-year lows. The stock market is near all-time highs and yet interest rates for mortgages and treasury rates are near all-time lows. Inflation seems also to be in check even though the economy is booming.

Usually when you have a booming market, as we do now, you would see interest rates at a much higher level which begs the question: Will interest rates stay this low forever?

If the stock market has a correction or unemployment rates go up and the economy slows down, interest rates will most likely come down from our current levels.

Unless we see a spike in inflation, I believe that there is a good chance that as the economy moderates we could see rates remain at the current levels, or decline.

Comments or questions, please email ron@ronmortgage.com or feel free to call me at 773-557-1000