Mortgage rates above 7% are the new normal. Economists said so. These are the same people who called the last normal.
The explanation is simple. Inflation is high. Investors have options. Your mortgage competes for dollars with everything else that pays interest, and your mortgage is not winning. It never had a personality.
Picture a bond market as a nightclub. Treasuries are at the front of the line. Mortgage-backed securities are at the back, holding a coupon and a dream. You are the guy who drove them there.
Economists say longer-term rates stay elevated because lenders want compensation for inflation. Lenders want to be paid. Revolutionary.
Retail traders will respond the usual way. They will refresh a rate tracker forty times a day. They will screenshot a 6.89% quote from a lender that required a kidney as a deposit. They will tell their group chat the bottom is in.
The bottom is not in. The bottom is a concept, like fairness or a fixed-rate savings account that beats inflation.
I have looked at the chart. It is a line. It goes places. Nobody on television knows which places, and the ones who claim to are paid by the minute.
The headline calls this normal. Normal means average. Average over what? Over the decade when money was free and you thought your house was a personality? Normal is a word economists use after the thing already happened to you.
So you wait for rates to fall. Wait. Rent a one-bedroom for $2,400 a month, and call it patience. The landlord has a fixed-rate mortgage from 2020 and a boat.
Seven percent is the new normal. Your down payment is the old normal. It will be there to greet you at 62.
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