How long are mortgage rates going to stay this low?

Question

I am really amazed by how low rates are right now. Normally I would assume that such low rates couldn't last for long. But, at the same time, I know that the Fed has promised to keep rates low for a few years. Does anyone have a sense for what to expect?

Answer 1

The key term Chmn Bernanke employs is "extended period" of time.  Once the verbage changes, the rates could be heading higher.

Answer 2

Based on the commentary of people way smarter than me, most expect rates to stay low for a while, at least through 2012.  Until we start seeing an overal decrease in unemployment and the country begins to have an overall positive feeling about the economy, I personally believe rates will continue to stay low.  

The Fed can only affect rates artificially.  Just because they don't raise their rates, doesn't mean interest rates for mortgages won't fluctuate.  Mortgage rates are tied directly to the 10 year treasury bond, and the more demand there is for t-bonds, the lower rates will be.

There's a lot of economic unrest around the rest of the world (Europe for example).  If economies around the world start to fail or possibly default, that's going to make the US even more attractive for investment...even despite our recently reduced credit rating.

Just my $0.02.

Answer 3

This is the Million Dollar question. In one hand you have conventional wisdon saying rates could not possibly stay this low for so long, we recently hit a 7 year low and that is going to be around for a year, 2? In the other hand you have to look at the market and the economy. Both of which are not very strong and in the past those two things are great indicators of where rates will go. My gut is that rates will stay low for atleast a year slowly ticking up with every bit of good news / inceased strength of the economy. Bottomline?, if you are thinking about buying or refinancing jump now, you wont be leaving any money on the table.

Answer 4

I would say 3-5 yrs, thats just my educated guess. I am interested in other peoples thoughts. I know its a great time to buy. There is so much available. If you have the profile, its time.