Mortgage Rates

30 year rates are typically affected by supply and demand of funds available for long term loans and the anticipated inflation rate.

Often the federal reserve lowers the fund rate when the economy is struggling which will also normally mean that the demand for long term loans is reduced. That is the primary reason for some correlation between the rates (not that a drop or increase in federal funds rate causes the 30 year rate to move but that the same economic factor - a slow economy, for example, that prompts the federal reserve to lower rates reduces the demand of long term borrowing which can lower the rate of 30 year mortgages).

Yet - with all the slowness in our economy - and actual price DEFLATION - we are still seeing 30 year mortgage rates at around 6% - which is still WAY WAY TOO HIGH FOR HOUSING TO RECOVER.