If you owned a home 10 years ago, you saw the value drop in 2009 and 2010. Now the value has recovered to the 2003 price or higher.
If you owned a stock portfolio 10 years ago, you saw the value drop in 2009 and 2010. Now the value has recovered to the 2003 price or higher.
If you look at mortgage rates in 2003, they hovered around 6% on a 30 mortgage. In 2009 and 2010, you saw those rates go below 4%, then in 2011 and 2012 briefly go below 3%. Today, they are hovering around 4%. After watching real estate and stock values go back to the 2003 level, we believe the mortgage rates will do the same and soon. Main reason: buyers of our treasury bonds and mortgage backed securities will reverse their buying habits. The major buyers being the Federal Reserve, European investors and China. In addition, once these rates move higher and retirees that own bond/mortgage funds will sell. This will escalate the move in interest rates. Our feeling is that getting a mortgage rate below 5% is great and getting one below 6% is still good.