Some talk going around that 30-year mortgage rates could dip below 4--today was at 4.125%. I've seen a lot in this crisis that I thought wasn't possible before, so let's wait and see. All of this, of course, will come at a price. How ugly will the bill be?The best reason for buying real estate right now (Today!) is not because real estate may not dip a bit more, but because this is a once in a lifetime opportunity to lock in rates at extremely low levels.
Rates will soon head much higher (I'm thinking double digit levels). If you lock in the current rated long-term, eventually within 5 to 10 years, making your mortgage payment will feel like just buying a Big Mac at McDonald's.
Sub 4%, and the Fed will probably have to buy $35B+ in Treas the next month.
ReplyDeleteIf interest rates go to double digets, homes will decline radically in value - because everyone purchases homes with leverage. $3600/mo will buy a $740 K home at 4.25%. At 10.25% it he same payment will not buy a $400K home. I bought my home at 9% and refinanced for lower fixed rates two or three times, once the bank modified the loan to stop me from refinancing elsewhere.
ReplyDeleteAs a potential first time home buyer, I am shocked, shocked I tell you! at the mortgage rates these days. Truly amazing.
ReplyDeleteJust one problem.
If you don't have a job, or your job is in danger of disappearing within the next year (like mine) . . . it doesn't matter how low the rate is. They could be GIVING ME MONEY to take a mortgage (which a rate below 4% is almost doing) and it wouldn't matter. No job means no mortgage. The economy has to be fixed with jobs before it can fix home prices in real estate.
So what bubble is the fed gonna blow up next to give us jobs? Oh wait, that didn't work the last 2 times since 2000, nevermind. If anyone has any ideaa, we're all ears.