Mortgage rates are largely determined by the interest rate on the 10-year U. S. Treasury bond.  The rates are is on the average about 1.8% higher than the prevailing Treasury rate.  The Treasury rate is influenced largely by the expected rate of inflation.  The U.S. had low rates of inflation for the first 14 years of the 2000s.  Real estate professionals who want to follow mortgage rate trends should keep an eye on the 10 year bond rate and the outlook for future inflation.  The mortgage rates are likely to be SOMEWHERE BETWEEN 1.5 AND 2% MORE THAN THE CURRENT TREASURY RATE.  This according to Dr. Dotzour, chief economist with the Real Estate Center at Texas A&M U.