Mortgage Interest Rates Go UP
A little less home for your buck, but don't give up, get in the game!
The window may be closing to get the best home for your buck, but mercifully enough (for all those I've been urging for months to get off the fence), the window appears to be closing slowly. In fact, we may have simply reached another mortgage interest rate plateau, but the ratcheting incline in rates is simply inevitable. A 3.5% 30 year fixed mortgage rate will likely not be seen again in any one's lifetime. But there's no crying in real estate, just like in baseball. Today's 4.5% 30 year fixed mortgage rate still seems like fiction prior to 2008, and is nothing to shake a stick at. In less than two years, rates will be much higher, and so will inventory levels, so home prices will likely not increase rapidly as we saw in 2000 to 2006 (a historically normal rate of appreciation is a welcome sight). So $500,000 today will be $510,000 in two years, but rates at one to two percent higher will make the $510,000 home that much further out of reach. There is no question about it, the window is narrowing for getting the most home for your buck. Adjust, re-calibrate, then take action and don't waste another moment thinking about missed opportunity even if it was due to your own hesitation or lapse of judgment. Get in the game as it is now; the window of opportunity is closing but it isn't shut just yet in terms of getting the best home for your money.
Real estate agents, even for some of my readers of this blog, have the unfortunate and at least somewhat undeserved reputation of "exaggerating" market conditions. It was no exaggeration when the Federal Reserve announced it would scale back on buying bonds later this year; it was a trigger for the spike in mortgage interest rates. The last month, and in particular the last three business days, have more than proven my point about urgency and lost opportunity. I won't over use the "I told you so" motif, but unlike many users of that cliched expression, I definitely DO NOT hate to say it. In fact, we have a gift and a reprieve; buyers and sellers still have a chance to act before the game completely changes. Real estate agents like myself who have successfully adjusted to all kinds of market changes over many, many years are ready for the game change (which essentially means simply different players), and those real estate professionals like myself will all adjust accordingly. But a number of you reading these words will simply not be able to be a player after the next significant mortgage rate jump; not for a long while, anyway, and I'd just as soon help you seize the day rather than wait for a second (or third or fourth) best opportunity possibly several years away. I am not speaking scare tactics, I am not preaching fear, I am speaking from current observation and many years experience.
Buyers, I want you to get the most out of the way things are while there is still time, wherever you happen to be on the buying spectrum. Sellers, I want you get the most out of the somewhat shallower pool of qualified buyers. The proverbial iron may have cooled a bit, but it is still hot enough to forge a real estate victory.
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