Analysis
How Rates Get Down to 5%
In this episode
The market has improved the last two days, and we know many are waiting for rates to drop. But what is realistic and what isn’t. We discuss what it will take for rates to get down to 5%, so you can decide if that is too lofty a goal.
Listen
Show notes
Most in the business and economic media make predictions on mortgage rates, but what they don’t do is show the mechanics as to how they make their predictions. We discuss all the time that mortgage rates follow inflation, we share what we think it will take for inflation, and then rates, to drop.
The part worth repeating
We’re not blindly making a prediction on hopes, we see the data and understand what is feasible or not.
Common questions
So what would you say is reasonable?
5.99%. Given the fact that the Federal Reserve’s goal is to get inflation down to 2%, we feel that rates just under 6% is a realistic target.
Mentioned in this episode
- Freddie Mac Primary Mortgage Market Survey
- CNBC, 10 yr Treasury Yield
- U.S. Bureau of Labor Statistics, Consumer Price Index
- Oil Prices