On the other hand, if mortgage rates fall, more people are able to buy houses. Prices fall further below, the lower the income needed to buy houses. When houses are bought, the building trade flourishes and this stimulates the economy in many ways.
Remember, high interest rates?
It's been 20 years since I've seen double-digit mortgage rates. Back in the late 70's and early 80's were double-digit mortgage rates are the norm. It was not until around 1985, after the Reagan administration came to an end, told the stagflation and the misery index, years of Carter seeks to boost mortgage rates in about 7%.
Since then, mortgage interest rates between 9% and 5.5% have fluctuated. In short it was a stable long interest rate we have enjoyed in recent years.
Greater or lesser?
Now the question is, where interest rates are not from here. In reading the letters, we will try to predict its future movement, as if reading the letters of the commodity to get a handle how the price of soybeans were under management. Then we will make a prediction about another product that can be done safely is shocking!
At this point, you should make a disclaimer. First, no one can really predict the future and secondly, each event can change the world, which seems to be the future, now in a heartbeat. In addition, we can not overlook the fact that unforeseen events can happen to everyone, from nothing. With that behind us, let's take a look at the graphics.
The last 18 years
During the 90's, interest rates ranging from 30-year fixed rate mortgage of between 9% and 7%. For now, George W. Bush took office, average 30 year mortgage rate of 8.75%. From there it fell steadily throughout the first term of George W. Bush. In fact, touched a low of 4.75% in late 2003. There were the interest rates between 6.5% and 5.5% for the next 3 years. This is an environment of unusually stable interest rates and was one of the reasons the housing market was red hot, and yes overbought.
In 2006, the trend broke above 5.5% to 6.5%, but rates never been greater. Now interest rates are around six percent and down.
Reading the cards
The technical operator, then the maker of goods by reading letters certainly think interest rates, since it is directed downward, again will test the low of 4.75%. It will be important to see if a double bottom is held at 4.75%. If this land is, will interest rates rise.
Based on market fundamentals, such as the U.S. central bank tries to reduce rates to stimulate the housing market seems more likely that interest will be breaking through the low of 4.75% as soon as they arrive. If they do, a new downtrend will be on the road. How much could get lower interest rates, you can only guess. But certainly not out of the question that we could see a 4% 30-year fixed mortgage rates at some point before this crisis ends.
4%!
Historically, about 4% at very low interest rates, but right now it really seems to be much more likely than 4%, a higher number to see how a 7%. So, it is worth, that's my prediction. Let's see, the fixed rate on a 30-year mortgage somewhere around 4%, before inflation takes over the business side.
Where do you get this aspect of inflation? Well, here's another prediction, and you may find it even more amazing than the first!
The Impossible Dream
It's all by rising crude oil. Crude oil is overbought! There is no reason for oil to trade above $ 100 a barrel. As the boom of technology-stock of the 90 and the housing market bubble a few years ago, not a rally that you can keep forever!
Because no one knows what the true market value of crude oil. However, you might think that is somewhere between $ 50 and $ 60 a barrel to be logical. However, if prices fall tend to go through the actual market value before floating back to them.
If the bubble burst crude oil market followed the same modus operandi market bubble bursts are, I can not see why it is impossible to see $ 35 per barrel again, small, at least for a while.
What does this mean for the price of gas? Maybe $ 1.49 a gallon? Well, it may seem completely out of balance with what we hear constantly of our day, evening news and I do not think can not happen.
Back to reality
No doubt there will come a time when $ 100 is not too high a price for a barrel of crude oil. There will come a time when $ 3.50 is too much for a gallon of gasoline. However, the charts tell us that there is no time here.
Therefore, cheap gas, such as the John F. Kennedy, Ronald Reagan and George W. Bush tax cuts to stimulate the economy, and how Bill Clinton labor contracts, reduce the cost of living that make the products more accessible to the public. These things, though good for the economy, bring a bit of inflation, which is to break the downward trend in interest rates.
I know, these predictions seem pretty stupid, maybe they are! However, my strategy is to believe it happens, and if they do, at least I'll be happy to believe that at the moment. On the other hand, if they occur, we'll all be happy!
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