Interesting question. I suppose they could if we continue to have slow growth like Japan.
Like I said before, I have a friend who’s only had ARMs for more than 20 years. He’s saved a lot of money. Those who wanted the “security” of fixed rates paid the price. Greenspan was right on this point.
I’m personally not making any bets on interest rates either way. But before you make any bets on higher interest rates as “a sure thing,” don’t forget that…
1) For the last 30 years, the trend in interest rates has been down.
2) Mortgage rates in Japan today are less than 2%.
brian, its been 25 years for me (taking out only ARM mtgs). I feel I HAVE saved a lot of money over the years since I never had a need for “serial refinancing” (for a rate reduction) OR “cash out.”
However, since I believe I have a low lifetime cap of 2.7%, I’ll never see a low of 2% with my current mtg (assuming fixed rates ever go that low).
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Happy holidays, Piggs! I’ve been “swamped” lately :=D
