There are two reasons why I project mortgage interest rates will go higher. The easiest reason is that because rates have always been higher. The average rate over the past 40 years has been near 9%, so I think that is the level that provides a balance between supply (the supply of money for loans) and demand. Investors providing money to the mortgage markets expect to get a rate of return, and there is no much room at 4% once you figure in traders costs, management fees, and mortgage application fees.
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