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.
Give your answer to this question below!
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;-)