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John Phipps: How Long Will High Interest Rates Last?

Mortgage interest rates just hit a twenty-year high, topping 7%. This is faintly amusing to some of us as our first home had a 7% interest rate thanks to the VA, and we celebrated what a bargain it was.

Coupled with the rising cost of housing, it has placed homeownership out of reach for many Americans. It also has another effect: mortgage bonding. During the still unbelievable run this century of interest rates as low as two-something, those long-term mortgages are a powerful inducement to not move.

For farmers, many of whom are looking at sub-4% long-term land financing, the real interest rate when inflation is added in is zero or even negative.

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September 14, 2023

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