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Is International Instability Keeping Mortgage Rates Down

International Instability Keeping Mortgage Rates Down? – Nah

Most people who buy Daytona Beach and Ormond Beach homes and condos care only that mortgage rates are low. With prices being low, it’s a pretty good situation right now for buyers. However, there are those who like to speculate rather than report useful facts and information.

It appears that whatever is happening in the world is often used as an explanation for favored opinions. I been seeing a few references in the past few days that domestic mortgage rates are being held down by instability in international financial markets. I don’t believe this at all.

I’m not an economist, but that doesn’t stop me from understanding some basic things about money and interest rates. Mortgage rates are low because the demand for loan money is down. If there were better places, safe places, for banks to loan money, they would – at higher rates. Long-term bond rates that are correlated with mortgage rates are low, so mortgage rates stay low.

If the economy were in any state close to normal, we suspect rates would be much higher. The US government has been borrowing and printing money during this recession and we will eventually pay for that with inflation. We can’t know for sure when, but if history repeats, we can fully expect it to happen. When inflation kicks in, interest rates and mortgage rates will rise.

Mortgage Rates Next Year Don’t Matter Now

My point is that mortgage rates are low now. Prices are low now. If you are planning to buy, this year and next year will probably be the best opportunity for a long time. If you’re in the market, watch prices and watch mortgage rates. In the long-term, you won’t need to hit the absolute bottom of both mortgage rates and prices. Anywhere close should put you in a solid position for future appreciation.

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