Whoo hoo! High five! Mortgage rates in the high five percent range that is!
We haven't seen rates this low in two years. Today, a 30 year fixed rate is showing 5.75% (5.905 APR). I would look for real estate investors to start putting their toes back in the water this spring, snapping up all those terrific real estate deals at lower borrowing rates.
The best/worst news we had in recent days was the announcement of higher unemployment rates in November. Bad for the folks who lost jobs, but it means lower wages for employers who have a larger pool to draw from and that means they won't have to pass higher prices on to consumers.
That combined with producers pulling back and you have--tah dah!--less chance for inflation, higher risk of recession. That allows the Fed to concentrate on ONE problem--recession--instead of TWO problems--recession and inflation. They can, in theory, help lighten the burden of a recession by lowering the Fed rate.
All this also increases the chances of mortgage rates coming down, as mortgage backed securities buyers will be less worried about inflation eating into their bond yields. Keep an eye on oil prices though--they could still cause a problem for producers and that could mean inflation again.