Mortgage rate is one thing on which the real estate market depends. If they are low then more and more people will buy the property and if they are high then most of the people will find it quite difficult to buy these properties. If you will remember the period before recession then you will realize that the loan rate was around 5 to 6%. This was in case of the fixed rate mortgage and for adjustable rate it was even lower. In fact it was between 3 to 4%. Thus mortgage rate was definitely quite low. Let us see what happened during the year 2010.

In the year 2009 it was being predicted that the mortgage rate will definitely increase a lot in 2010. But this was definitely not the case. However this was a general belief. The experts realized that lots of unemployment forms were being signed and the people were not spending their money due to the thin wallet.

That is why they predicted that the mortgage rate will not rise by much in 2010. Now it was all up to the government. The history was about to be written. The fact was that for the first time in the history the people were not going to be affected by the inflation. And this really happened. The inflation rate was found to be just 0.19%. This led to a real boom in the field of real estate. The people have again started buying the properties as the interest rates have not been affected.

You are still going to get the 30 year fixed ARM at the rate which is as low as 4.25%. If I am not wrong then this was definitely the rate before recession. At that time as well you have to pay around 4.25% interest rate. However do not get confused by the terms interest rate and the mortgage rate. Both of them are the same and in most of the cases you can use them interchangeably. But you should remember that the mortgage rate is the interest rate in case of real estate only. You will not call it a mortgage rate in share market.

Thus the prediction of the experts that the loan rates will remain the same was found to be true. There was definitely not much difference between them in the year 2010 and 2008. Hence the real estate market is again witnessing a booming period and the people are again happy. Have fun! Larry Martinez