Low rates are dead.

Say it with me..."The free money is gone." Mortgage Rates in 2024 will remain higher for longer. In-depth analysis of interest rates, particularly focusing on their long-term trends and the economic principles underlying their movements. The content is presented with a historical perspective to help understand current financial market behaviors. 📈 Understanding Interest Rates and Economic Cycles Historical Trends: The discussion begins with a review of the 10-year treasury note, a critical benchmark for mortgage rates. Historical data from 1913 to present is used to illustrate the cycles of interest rates moving in trends, which have tended to either rise or fall within certain periods. Current Trends: Recently, there has been a shift indicating the end of a long-term downward trend in interest rates that started in 1984. This shift suggests that we might be entering a period of rising rates, a change from what many financial professionals have experienced in their careers. 🏠 Implications for Real Estate and Finance Mortgage Rates Relationship: The video explains how mortgage rates typically follow the trends of the 10-year treasury note, usually with a lag and at a spread, affecting affordability and investment decisions in real estate. Fundamental Changes: The presenter argues that we are likely to see higher interest rates for an extended period, challenging the common expectation that rates will always eventually fall to lower levels. 💡 Strategic Financial Planning Adapting to New Normals: Viewers are encouraged to consider how a new era of potentially higher interest rates could affect their financial strategies, emphasizing the importance of preparing for different market conditions than those seen in recent decades. Practical Advice: The advice shifts towards more conservative financial strategies, such as reducing debt and increasing savings, to buffer against the impact of rising interest rates. 🔮 Future Outlook Long-term Predictions: The analysis includes predictions that the current uptrend in interest rates could last for many years, mirroring past economic cycles where such trends have sustained over long periods. Economic Implications: The video also discusses broader economic issues, such as government spending and its influence on inflation and interest rates, suggesting a complex interaction between fiscal policy and financial market outcomes. Insights based on numbers Interest rates have historically followed long cycles of rising and falling, often correlating with broader economic conditions such as inflation and government fiscal policies. From 1984 to 2022, interest rates have been in a downward trend, and recent data suggests this trend has been broken, indicating a potential long-term rise.