Historical Chart of 30 yr fixed and Prime Rate going back to 1963 - For all those who think rates are not going up, think again...

This chart shows why rates are going to go up and possible where they are headed.  If rates are cyclical then this chart should provide some clarity as to where rates are head in the short term.  The one thing this chart doesn't reflect is that I believe that 30yr rates will start to act on there own away from the prime rate.  In the future the 30 yr rate will not pair itself with the prime rate.  This is due to factors effecting 30 yr rates that do not have a sever and direct effect on the prime rate.  There will still be some correlation but the exact movement of both will not follow such a definite path.  I put this blog out not to doom and gloom but to educate people to not be surprised by higher rates in the short term future of the housing market.  I know as much as anybody that the effect of rising rates will be a detriment to our industry but once the public is used to the idea of higher rates it will be business as usual.  A silver lining may just be that the higher rates will kick some of these people on the fence in to gear to purchase a home before the rate goes to high...