Making Correct Mortgage Rate Predictions

Over the last ten years, the housing market has seen its ups and downs; literally.  From the early 1990s until June of 2006, the housing bubble was created.  Home prices skyrocketed to levels that many families never would have guessed.  Some home owners refinanced their homes on a yearly basis and got tens of thousands of dollars just because the value of their home had increased so much.

Then, it all turned for the worst in June of 2006.  What goes up must always come down could not ring any more true than in the housing market.  During the bubble that was created by low mortgage rates and a strong economy there was an excess of housing inventory that was built.  The demand for new homes was no longer there and the months of housing supply started to increase.  As the housing supply increased and borrowers started default the housing bubble burst.

Now we are in a time when everyone wants to be up to date on mortgage rates news because no one knows where things are headed.  Many people are trying to give mortgage rate predictions for the next few months and even years, but the only thing that will determine that is the overall economy.  If the economy gets better and home prices start to increase, it is highly likely that we will see mortgage rates get back to normal levels; most likely back above 6%.  If the economy continues to struggle, many people will be making mortgage rate predictions closer to 4%.