With Lower Expectation of Inflation Rise, Mortgage Rates Could Fall
Economists have announced that economic growth will slow down in 2008. Unemployment should tick up only slightly, but remain under 5 percent. But if you’re watching where interest rates are going, the metric to watch is inflation. Experts agree that inflation will remain under 2.5 percent. Earlier predictions were that inflation would be over 3 percent in 2008. If growth isn’t outpaced by inflation, mortgage interest rates could drop further. Mortgage interest rates have fallen below 6 percent for conforming, fixed rate loans. That’s because the government’s predictions about a softening economy and less inflation have been priced into the market.
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