After dropping more than 100 basis points through the last three quarters of 1997, long-term mortgage rates have remained relatively steady at around 7% since January. The stabilization may be due in part to factors external to the mortgage market. With the effects of the Asian financial crisis becoming clearer, there appears to be a general market perception that short-term interest rates will not decline again in the near future.
Suggested citation: “Housing Finance,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-05, pp. 17-18, 05.01.1998.