October 19, 2017

Amazing Rates

Rates are amazing today.  I mean Really Amazing!  It just might be the best time to purchase a home in 30 years.  Home prices are relatively low, interest rates are so low that I keep pinching myself to make sure I’m not dreaming, and despite what misinformation you may have read elsewhere, it’s fairly easy to obtain financing.  I can close a purchase transaction in less than 20 days, and you still only need about 3.5% down to purchase a home if you’re not eligible for a VA benefit (VA loans require zero down payment).

It’s deja vu all over again.  It was about this time of year in 2010 that we witnessed the lowest interest rates in 20 years.  We matched that low earlier this year for about a week, and then last Thursday, September 22nd, 2011 we hit a new low for fixed rates.  For a few fledgling hours, 30 year fixed rates for qualified borrowers fell below 4%.  Friday brought rate adjustments for the worse, but that’s not to say that they still aren’t at 20 year lows.  In fact, they’re basically still where they were last September.

In my opinion it won’t last long, just as it didn’t last very long in 2010.  By November last year the rates spiked, and they kept rising into the first quarter of 2011.  Yes, the Federal Reserve recently made some brash promises to hold rates artificially low for at least two more years, but there is no specific interest rate definition of “low”, and I believe the fed only made that statement because they feel that it will take approximately two more years to right the economic ship.

Either way, it’s crazy to wait and gamble just for gambling sake.  When you have a perfect storm like we do now, you stand to lose more than you could gain by trying to predict the market.  Why take the risk?  Housing prices could creep up, or rates could rise, or we could see another tightening in lending guidelines, making it more difficult to borrow.  Even if rates were to creep back into the mid to high 4’s, (which is still extremely “low” by historical standards) that could still cost thousands over your mortgage term.  No one knows what is going to happen.  I couldn’t have predicted they’d get as low as they did last week, but I also didn’t expect the spike we saw last November.  Even true market experts can only guess at what will happen.

All we know for sure is that this is a fantastic time to become a homeowner, and nobody knows what tomorrow will bring.

Enjoy the ride, and please feel free to contact me if you have questions, or if you want to find out what you may qualify for.

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