Low Inflation Keeps Rates Where We Want Them

Mortgage rates are on the move again, with FRMs nearing record lows and ARMs reaching new depths.
Dice with interest signs on them.Freddie Mac today released its weekly Primary Mortgage Market Survey for the week ending November 4 to show:
*30-year fixed-rate mortgage (FRM): Averaged 4.24 percent, an increase from 4.23 percent last week and the record low of 4.19 percent the week before.
*15-year FRM: Averaged 3.63 percent, a decrease from 3.66 percent last week, but an increase from the record low of 3.62 percent the week before.
*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 3.39 percent this week, a lowest on record since Freddie Mac started tracking it in January 2005.
*1-year ARM: Averaged 3.26 percent, also a new record low.
β€œWith little sign of inflation to push up long-term interest rates, fixed mortgage rates held relatively steady this week, while ARM rates hit new all-time record lows,” said Frank Nothaft, vice president and chief economist of Freddie Mac. β€œIn its November 3rd monetary policy committee statement, the Fed affirmed that measures of underlying inflation are somewhat low, relative to levels that the committee judges to be consistent, over the longer run, with its dual mandate.”
Yesterday, the Federal Reserve announced that it would use quantitative easing to buy $600 billion in U.S. Treasury bonds by the end of June 2011. One reason to do this is to keep those interest rates near record lows, making it easier to buy a house or to refinance a mortgage.
I say, how low can they go? Go, rates, go!