In my comments, I will delve more deeply into the reasons why these long-term interest rates have fallen so low. This examination may be useful both for understanding the current stance of policy and also for thinking about how rates may evolve. In short, we expect that as the economy recovers, long-term rates will rise over time to more normal levels.
Indeed, a comprehensive survey by Ron Feldman (2001) finds that a change in mortgage rates would have to be at least 200 basis points before it would have more than a trivial effect on homeownership.9 Most analysts conclude that the primary determinants of homeownership appear to be the loan-to-value, debt-to-income, and payment-to-income ratios associated with the mortgagor and the mortgage.