Will rates be low forever?

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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

About Ron Ricchio

Renato (Ron) Ricchio is president of Chicagoland Home Mortgage. He grew up in Westchester and attended St. Joseph High School and DePaul University, taking a job as a loan officer in the mortgage industry soon after graduating with a bachelor's in finance in 1991. He started his own company in 2001, which he operates today. He has been ranked in the top 150 loan originators in 2010 and 2011 by Origination News. Ron is happily married with three beautiful children. A board member of San Francesco Di Paola Society and the founder of Ricchio Family Toy Drive for Lurie's Children's Hospital, he enjoys cooking and spending time with family and friends.

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