Clark thinks mortgages will go down to the 5% range?

If mortgage rates go down, that means interest rates in general will go down. That means either the Federal Reserve has mission accomplished almost by getting inflation down and/or we show signs of a recession. What do you see in your personal lives that suggest either is in the works?

Keep in mind that the Fed uses Fed Funds rate to address the short end of the yield curve. This would be things like savings rates, auto loan rates, HELOCs, and credit card interest rates. However, this would not directly affect things like 20-yr and 30-yr mortgage rates. Right now we are in an inverted yield curve situation, which means short-term rates are higher than long-term rates. This has historically been an accurate predictor of an upcoming recession. Once the yield curve returns to a normal state then we will see where mortgage rates fallout. Keep in mind that the longer term mortgage market had been heavily influenced the the Feds quantitative easing process over the last 15 years which resulted in artificially low rates.

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