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Saturday, May 7, 2011

Where were YOU in 2001?

For those of you who were in the business in 2001, you might remember rates were coming off a high where rates were pushing 10% on jumbo fixed rate mortgages.  People were still buying homes back then.  Looking at the employment numbers compared to the rate numbers, you will see where we are heading as the jobs picture starts to improve and inflation starts to kick in.  If you look at the charts there is a clear correlation between employment growth, inflation and interest rates.  As jobs go, so goes inflation and interest rates. 

The point is, we complain when rates go over 5%, but the reality is that rates could easily go to 10%, but that will be relative in terms of the business.  We have already seen a contraction in the number of people in the business, so there will be a smaller pie, but fewer people competing for it.
10 Years of Job Growth Information
Historical Inflation Rate - 10 Years



Weekly average rates on 30-year fixed, 15-year fixed and 1-year adjustable rate mortgages vs. Prime Rate, 1-Year CMT, 1992 - present.
Rates for the last 15 Years
Historical Graph

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