Falling oil prices typically lead to lower heating bills and cheaper fill-ups at the gasoline pump. Less obvious to the average consumer is the role cheaper oil is playing in driving down mortgage rates. It is a complicated and indirect link that will likely keep rates low well into 2015, economists say. Average fixed mortgage rates dropped this month to their lowest levels of the year, according to Freddie Mac. In general, interest rates tend to be very sensitive to inflation. Because cheaper oil lowers costs throughout the American economy, inflation is pulled downward as well, said Keith Gumbinger, the vice president of HSH.com, a financial publisher. In turn, lower inflation can allow for interest rates in general to decline. [Read this article]
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