Mortgage Rates Aren’t Going To Get Any Lower

By now, you’ve realized that today’s extremely low mortgage rates are a great bargain, but, maybe you’re holding out that they are going to go even lower. Well two economists at The Federal Reserve say it ain’t going to happen.

Since the real estate bubble burst, and the economy came crashing down just four short years ago we have seen a steady trend downward on the interest rates for all types of mortgages. Unfortunately, it looks like we may have hit the bottom of the barrel for rates because there is just nowhere else for them to go with the current system.

As reported by Fortune-CNN, even the economists at the Fed think this is the bottom, even though technically they should be around 1% lower:

If you are looking to refinance your mortgage, this is close to the best deal you’re going to get. That’s the message from two economists at the New York Federal Reserve.

That contradicts what some have been saying for a while. In fact, observers have been flummoxed about a split between home loans rates and mortgage bonds. While the latter has continued to drop, mortgage rates have been stuck in the mid-3% range. Based on prices for mortgage-backed securities, home loan rates should have hit 2.6% by now.

The two Fed researchers, Andreas Fuster and David Lucca, though, say in a blog post that their research suggests it’s unlikely mortgage rates will ever get that low. They say there is a possibility that rates may make it down to 3%, but that would require some pretty significant policy changes, and even those changes aren’t guaranteed to produce a 3%, or lower, mortgage rate.

So for our clients and readers who have been on the fence about purchasing a new home, or refinancing an existing home now is the time. Unfortunately, it’s hard to predict how long these low rates are going to last.

If you are thinking of buying or refinancing remember, while the rates are low, the banks are still very picky. Start taking action today to get all of your ducks in a row and make yourself an attractive candidate for that new loan. That includes paying down your outstanding debts and keeping revolving debt under 50% on each card and across the board.

Also, if you were effected by the economic melt-down and have issues on your credit reports now is the time to start looking at credit repair, which our firm would be delighted to help you with. By making sure all of the information that is reported on your credit reports is fully compliant with the law, and is reported in the most favorable way possible you have the best shot at locking in some of these historically low rates.

Are you considering purchasing a new home or refinancing? Let us know if you’ve been on the fence and what you’re waiting for by commenting below.

Image By: Philip Taylor

About Anthony Candella

Anthony is the founder and Directing Attorney of and has been helping consumers just like you understand and improve your credit and financial situation since 2003.