Can Mortgage Rates Go Lower?

Click on this chart to open a bigger version to look at.

This chart shows the prices of the bond markets.  Prices move in opposite direction of rate.

See that high from January?  See how we are getting close to that again?

It is highly unlikely that bonds can get higher than that level again anytime soon.  Translation:  don't expect dramatically lower mortgage rates.

Also, mortgage lenders are bleeding money these days and fighting for their own survival.  The biggest mortgage lending operator (Bear Stearns) just went under.  If the big guy tumbles, you can bet the smaller ones are also hurting.  Translation:  these lenders are not going to lend money out as cheap as they did a few years ago.

Double translation:  there really isn't a strong foundation to get us to much lower interest rates than we have right now.

Just a few weeks back the 30 year fixed was up at 6.375%.  Now, it's been dancing around 5.5% to 5.75%.