Interest Rates Rising: Don’t Panic. Yet.
by Peter G. Miller
Given the reaction in some quarters, mortgage rates at 6.01 percent plus .7 points are apparently an example of financial shock and awe, the first hint of oncoming economic depression, bursting housing bubbles, and looming currency devaluations.
Relax. The fact is those allegedly-worrisome 6 percent loan levels are ludicrously cheap by the standards of recent decades and cheaper even than mortgage rates last year. The time to worry is in the future, a time which may not be so far away.
But first, the good news.
In June, 2003 we saw the lowest mortgage rate in 45 years — 5.21 percent plus .5 points. Now we’ve just topped 6 percent. Seen another way, rates have risen a total of .8 percent since the 2003 record low, a performance which seems delightful when considered against past eras.
