Mortgage rates above 7% by end of year!?

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Submitted by highpacific on July 3, 2008 - 5:29pm

Will mortgage interest rates go above 7% by the end of 2008? Seriously.

The Federal Reserve is having to deal with real inflationary pressures for the first time in many years. Many economists and some of the Fed board members themselves are hinting that fed controlled interest rates must be raised at some point to start fighting inflation.

Considering the nice chart The Professor just provided. Is there anything left that could stem the current rise in mortgage rates we are now experiencing?

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My guess is that inflation is
Submitted by mixxalot on July 3, 2008 - 6:19pm.

My guess is that inflation is far worse than the FED is telling people.

I am predicting 13% interest rates by end of 2009 or sooner to combat inflation. A guess but could happen the whole economic scene reminds me a lot of the 1970's with rampant inflation and high interest rates with high oil prices but this time far worse.

Although I'm self-employed
Submitted by jpinpb on July 4, 2008 - 9:44am.

Although I'm self-employed and was subject to higher rates, I remember in 1990 paying 9 3/4, of course was able to refinance later at a lower rate.

I can easily see 7% coming at a home near you.

High rates would be great for
Submitted by TheBreeze on July 4, 2008 - 10:00am.

High rates would be great for most of us Piggs as it will further depress the price of housing. Many of us have been saving for a down payment for years, so we can put down a lot which will make the effective price of the house we end up buying much lower.

I say bring on the high gas prices and the high interest rates. It will reward those of us who have saved and lived prudently.

By now we should all know
Submitted by Bugs on July 4, 2008 - 10:07am.

By now we should all know better than to attempt to predict timing. Except for entertainment purposes, of course.

I believe mortgage rates will
Submitted by j on July 4, 2008 - 2:19pm.

I believe mortgage rates will be 12%+ by the end of 2009. They should be 8%+ at the end of this year, but the election will stop that. The week dollar policy has not worked. Unless Ben wants to risk being the guy who devalued the US Peso like the Mexican Peso of the 70's, rates must go up.

Remember mortgage rates were in the mid teens in the early 80's.