Have Home Equity and Mortgage Rates Bottomed?

Long-term interest rates present a real conundrum here. 10-year rates have fallen from 3.05% to as low as 2.35% over the last six months. Fears of a global recession and Brexit uncertainty have caused money to pour into the US and to drive down what are still comparatively high US rates. Barring a global recession, it does seems that long-term interest rates should move higher as the Fed reduces its portfolio and as the risks in the US deficit and debt come to the fore.

Doubleline’s Jeffrey Gundlach made a compelling case for higher long-term rates on CNBC this past week.

Gundlach's view prompted an interesting discussions on CNBC's Options Action, one of the very few shows on CNBC that is actually worth watching. Mike Khouw and Dan Nathan suggested that a trading opportunity exists in the market’s complacency. Interestingly, Carter Worth, one of the traders, and many others, still believe that the 10-year goes to 2.00% here.

I wouldn't advise betting through market instrumnets one way on another on the direction of interest rates here. But, I’d heed the advice of Gundlach and others not to become too complacent about lower rates. Therefore, if you are thinking about remortgaging or locking in a home equity loan, this is as good of a time as any to take action.