Is a 4.5 percent mortgage likely
Bill Gross at PIMCO seems to think that a 4.5 percent mortgage is likely. CNBC has a video interview with Bill Gross where he suggests the Fed will cap the 10 year Treasury rate.
Combine this with today's announcement on the next round of the bank bailout by Treasury Secretary Timothy Geithner and the likely passage of the economic stimulus bill which currently includes a $15k homebuyer tax credit and indications that Fannie and Freddie will finally craft a framework that works to prevent foreclosures by easing payments for troubled borrowers and you can see that the government is pulling out all the stops.
Hat tip to Bill at Calculated Risk who always has the best charts. Below are the 10 Year Treasury rates since 1962 and since January 2008. Note that Treasuries have moved up to 3.04% since setting an all time low of 2.07% on December 18th. Mortgage rates are currently quoted at 5.25% after flirting very briefly with 4.5% in mid December.
