Future Mortgage Interest Rates

3 posts / 0 new
Last post
Jarhett's picture
Jarhett
Status: Silver Member (Offline)
Joined: Nov 21 2008
Posts: 132
Future Mortgage Interest Rates

With the fed coming out and announcing that they will be creating a trillion more dollars, I was wondering when do you think the fed will raise interest rates to reel the money back in.  I see the similarities between now and the 1980's where Volker raised interest rates so much that it was common to see 15% mortgage rates.  How long do you see these 4% interest rates staying around? I am looking to buy my first house, however I do not know how much lower real estate will go.  Many articles I read say the real estate market should be going down for a many more years however, does this take into account helicopter Ben and his printing press?  If Bernanke keeps printing money won't that re-inflate the housing bubble?  I guess I am trying to find a happy median between interest rates and the cost of housing?

the navigator's picture
the navigator
Status: Bronze Member (Offline)
Joined: May 20 2008
Posts: 30
Re: Future Mortgage Interest Rates
Jarhett wrote:

With the fed coming out and announcing that they will be creating a trillion more dollars, I was wondering when do you think the fed will raise interest rates to reel the money back in.  I see the similarities between now and the 1980's where Volker raised interest rates so much that it was common to see 15% mortgage rates.  How long do you see these 4% interest rates staying around? I am looking to buy my first house, however I do not know how much lower real estate will go.  Many articles I read say the real estate market should be going down for a many more years however, does this take into account helicopter Ben and his printing press?  If Bernanke keeps printing money won't that re-inflate the housing bubble?  I guess I am trying to find a happy median between interest rates and the cost of housing?

 

yeh, you are asking some 64 trillion dollar questions there.  when the fed decides to raise interest rates is anyone's guess, imo.  who knew this collapse could happen so quickly?  if you consider life last june/july, few were expecting what we are seeing today all around us.

but the best answer i've heard regarding real estate and how it will behave in the coming inflation was this:  real estate will appreciate, but not as quickly as other "real" things because it is still recovering from the downturn, there is still a lot of excess to be wrung from the system.

good luck with whatever you decide.

Montana Native's picture
Montana Native
Status: Silver Member (Offline)
Joined: Mar 17 2009
Posts: 166
Re: Future Mortgage Interest Rates

Hello, you took the time to reply to my post concerning buying the other day so I'll return the favor. My thoughts are to get into the market sooner than later (6 months frame). I'm going to jump on the rates and make low ball offers, although I'll most likely pay too much for the house at least I'll get one. The concerns that guide my decision are number one, rates are low and loans are still available with a reasonable down payment. If the economic downturn accelerates in pace, getting a loan could be the number one problem. Additionally Bernanke wants inflation, so if you invest well, your house payment should become cheaper in the long run. ie, your gold will be worth a lot of dollars in the future. The amount of funny money being injected is HUGE, classically inflation is fought with increased interest rates as I remember it. I guess like W my gut tells me sooner than later is the safer bet. Who cares about a few thousand when the security of a home is at stake? With the in progress meltdown and the tricks the Fed is pulling out of their hat, security has become my number one concern, timing has been relegated to second.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments