Average mortgage rates have been going higher in June and that trend could continue.  Since the end of May, according to Freddie Mac average mortgage rates have gone from 4.8% to 5.59%.  This is a jump that the housing market did not need.  For the last three years we have seen steady declines in the value of American homes.  President Obama and Ben Bernanke did everything in their power to keep average mortgage rates under 5% but free markets eventually won out in early June.

If home prices did not find a bottom when mortgage rates were under 5%, what is going to happen with rates trending higher with the possibility to exceed 6%.  There is no doubt that sellers are going to have to lower their prices to sell their homes, but can prices go down any more?  A 32% average drop since the top in July of 2006 has been a very rough experience for many, but imagine if the worst has yet to come.

We all know that the subprime mortgage crisis changed the entire mortgage industry, but could it be the cause of a 50% decline in home prices?  I honestly believe that if the government had left everything to free markets, we would be out of this housing downturn much quicker.  I am by no means saying it would be over by now, but with the fluctuation in average mortgage rates things are going to get very tough for home buyers and sellers.  Now that the Obama administration has dove headfirst into printing money in an attempt to lower mortgage rates, what’s next?  That didn’t seem to work out too well and we are several TRILLION dollars deeper in debt.

Please make sure to use Subprime Blogger to get your analysis on mortgage rate trends.  With the Obama administration printing such a great deal of money, inflation is very likely, so make sure to make wise inflation investments starting today.