Q&A: what is the trend for mortgage rates in the next 5 yrs?

Posted on Oct 31, 2012 in Unique Loan Programs

mortgage rates trend
by SS&SS

Question by amy: what is the trend for mortgage rates in the next 5 yrs?
i’m doing a project on real estates and really need the projected discount rates to make the assumption. anyone knows where can i find it??
thanks in advance =)

Best answer:

Answer by 60187guy
1) Steady.
2) Rates could go up if there is a recovery in the market.
3) Rates could go lower if property demand dries up and practically nobody borrows.

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One Comment

  1. Nobody can say what the rates will be next month, never mind in 5 years. Mortgage rates are linked directly to the 10-year and 30-yr bond yields and not what the Federal Reserve does with interest rates. This is a very common misperception. Bond yields are very low right now and moving lower in the near term. 30 year fixed mortagges are about 6% right now. Due to the state of the economy and the $ 8+ Trillion in bailout money being added to the system, other countries will eventually start dumping our bonds. This will drive bond prices lower and yields higher…much higher. I wouldn’t be surprised if mortgage rates are 10%-12% or even higher 5 years from now. JMO
    But if I was doing the project I would definitely focus on the long bond and not the Fed discount rate…guaranteed to get a higher grade than those who focus on the Fed rates;-)