Falling oil prices bring down mortgage rates

Inflation outlook improves

Long-term interest rates are sitting on a six-month low, the 10-year T-note at 4.75 percent and low-fee 30-year mortgages at 6.5 percent. The reasons that these rates are so low are not the widely advertised pre-recession or housing collapse.

The biggest recent help to long rates is the authentic collapse in commodity prices: oil is $62.70 this morning, natural gas $4.85 (10 bucks below last winter), wholesale gasoline $1.53 (which should put retail at $2.20 or less within two months), and gold is in freefall at $573 (down from $730 in May).