Both the White House and the Federal Reserve have announced that economic growth will slow down in 2008. Unemployment should tick up only slightly, but remain under 5 percent. But if you're watching where interest rates are going, the metric to watch is inflation.

The White House says inflation will remain under 2.5 percent. Earlier predictions were that inflation would be over 3 percent in 2008. If growth isn't outpaced by inflation, mortgage interest rates could drop further.

Why? Mortgage interest rates are tied to mortgage backed securities or mortgage bonds. They go up or down on the prospect of inflation.

You may have noticed that mortgage interest rates have fallen below 6 percent for conforming, fixed rate loans. That's because the government's predictions about a softening economy and less inflation have been priced into the market.

So is it time to lock in your rate? It's a good idea if you are in an adjustable rate loan and you want the security of fixed payments. If you're looking to buy, most locks are 30 days which will give you plenty of time to find a home.

If you're refinancing, here's how to tell if it's worth it.

One point is one percent in interest, so with every 1/8th of a point, you'll save about $25 on the average loan amount.You can do an equity loan and take some money out for home improvements. If you aren't sure of your equity position, you can try to do a Rate and Term refinance to roll what you currently owe into a new note.

But, your closing costs could run into the thousands of dollars with attorneys fees, loan fees, title insurance and so on. Ask your mortgage broker for a good faith estimate. You can use this to figure how soon the savings on your interest rate will pay back your closing costs. If your closing costs are $3,000 and it takes three years to pay it back, that's a good deal only if you plan to stay in your home another three years. If not, you're better off leaving your rate where it is.