Alexander Field : Mortgage Rates Tumble to Lowest Level of 2017 : The Mercury News
Alexander Field, the Michel and Mary Orradre Professor of Economics, weighed in on an article for The Mercury News discussing how mortgage rates have fallen to their lowest levels of 2017. The decline reflects a drop in the 10-year Treasury note yield, which is often indicative of the future of mortgage rates.
An excerpt from the article:
“With mortgage lending, you’re typically lending for a longer period,” said Alexander Field, professor of economics at Santa Clara University. “And when you’re doing that, you really do worry about inflation, because inflation will reduce the value of payments on principal and interest.”
And this is where geopolitics enter the picture. Events that seem to increase the risk of inflation will tend to push mortgage rates up, while events that reduce the expectation of inflation can cause rates to fall.