Pimco’s Gross: 30-Year Mortgage Rate May Fall to 4.5%Andrew Fisher | 03 Dec 2008 | 09:39 AM ET Text Size Bond guru Bill Gross told CNBC that the 30-year fixed-rate mortgage could fall as low as 4.5 percent as the economy stabilizes.“The mortgage rate will come down another 50 to 100 basis points,” Pimco’s founder and chief investment officer said. “That’s basically what the government needs. They need a 4 1/2 percent to 5 percent 30-year rate in order to support home prices and, yes, to encourage refinancing and the process of reliquification within the economy.”His advice:  “Don’t refinance yet.”Gross also said he sees two conflicting trends in the bond markets, with corporate bonds overtaking Treasurys as attractive places to invest money.Watch Gross’s interview at left.“Treasuries have basically benefited from a flight to quality,” he said. “On the other side, though, corporate bonds—for example, Caterpillar and Hewlett-Packard—their spreads are 5 percent more than Treasurys, and so, yes, there’s an increasing attraction to the corporate bond market.”That said, he’s not buying corporate bonds.“PIMCO basically is still under what we call the government umbrella, and close to the handle,” he explained.  “Those would be assets, mortgage-backed securities, that the government has announced that they’s going to be buying $500 billion of over the next few quarters.”Some time next year, he sees stabilization coming to the economy, and lower mortgage rates are an essential part of that process.