Lowest Interest Rates Ever, Thanks to You

Interest rates for home loans are the lowest on record, despite months of predictions that they would rise. That's great news for the housing market.

To whom do we owe thanks? Take a look in the mirror.

American investors, from individuals to institutions, are helping to push down interest rates by buying up bonds, starting with U.S. Treasury bonds. Mortgage interest rates tend to follow the yield on Treasury bonds very closely, and U.S. investors are now the second largest group of investors in Treasuries, pushing the price up and the yield on the bonds down.

The large stake that Americans own in our own national debt may help calm fears that a decision made by investors in some faraway country -- such as a change in Chinese monetary policy -- could hurt American borrowing power.