Janet Yellen has the unenviable position to determine when the interest rate merry go round will pause and rates will begin to rise to a more “normal” level.
When the feds began monetary easing in 2008 and 2009 I doubt anyone thought that we would still be here in 2016.
The good news for the current homeowner is the loan you have will never be lower in rate. Smart consumers have created long term debt at incredibly low rates, an opportunity of a lifetime. The move up buyer will eventually face some tough choices. Keep the loan they have or move up in both price and rate. This combination of forces is likely to put pressure on real estate pricing advances unless true wage rate growth leads the way.
In this cycle, rates have remained low while wage growth has been minimal.
The response to the economic woes of 2007 and 2008 have created a generational opportunity for many people. In time we will see clearly how this all plays out. The past decade has been a great experiment in the complex world of negative interest rates and quantitative easing.