patrick.net

50% chance. It depends on economy. Only way it can drop is by that time it is clear that we are in double dip recession already.

2011 Interest rates in my opinion will be 3.25 for mortages, as the 2 goes zero or neg. the 10 closly follows, and the 30 year bond 1.80-2.00

And housing prices will remain the same price because people can now borrow even more, rendering 50% downpayments useless. It is not hard to find someone willing to pay $900/mo more than me in mortgage because they have very little downpayment.

That's why I got a 5yr ARM. The cost of production of fiat is very low. And the method is by creating credit. Now, what we've seen so far is it really not resulting in more home loans. The credit can be more profitably invested in derivatives. so, why would they created every-lower mortgages if they can invest elsewhere? That's the main counter force I see. Still I agree on ever lower rates.

To dadab:

We never got out of our current recession so a "double dip" would require things like unemployment improving.