Inflation: the arch enemy of mortgage rates!

Inflation: the arch enemy of mortgage rates! People ask me on a regular basis what I think will happen to mortgage interest rates. These folks range from people that already have a loan in process; to people in the real estate industry wondering what the future might hold. Here is the basic answer: If inflation is a factor in the economic environment, then interest rates will go up. If people know what will be happening with inflation and/or recession, they can predict for themselves where interest rates will go. So my question to you is this? Will inflation be a factor in the coming years? The government has spent trillions of dollars in an attempt to create jobs, drive down mortgage rates, and get the economy moving again. So far, the results have been mixed. One thing everyone knows though is that all of this must be paid for someday. How do you pay off trillions of dollars if you’re the government? You raise taxes. All the government’s work, while honorably motivated, is very inflationary in nature. So we should expect interest rates to be moving up in the coming months and years. I pay a substantial amount of money to subscribe to a service that tracks the mortgage interest rate market by the minute. This particular service also sends out a daily update to it’s subscribers educating us on what’s going on in the financial markets. The service is very valuable to me and the clients whom we serve. The founder of this service, Barry Habib, is often featured on Fox Business. He provided some insights regarding inflation and interest rates recently (July 23) that I think are very valuable. The video is on YouTube but we’ve embedded it on our website for your viewing. I encourage you to click here to watch the video and see what you think…

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