Logan Mohtashami, a Housing Wire data analyst, wrote a story last week that garnered HUGE attention as he wrote what would it take for mortgage rates to drop below 2%? Here is what he said-
We would need to see the 10 Year Treasury yield go negative to as low as -0.61% for a sustained time period.
The U.S. government stops or significantly reduces fiscal stimulus.
The stock market sells off again.
Credit stress rises again because of inaction by the federal government.
A terrible winter that increases infection rates and deaths across the country.
Currently our government is fighting over how much more stimulus to provide, so #2 is currently happening; but for how long? I believe #3 is very likely to happen. And #5 is certainly a possibility. But, I can see conventional 30 year fixed rates dropping to 2.50% and we may see VA rates just below 2%.