What’s happening with real estate interest rates in 2018
Why now is still a good time to buy a house
There was a time when no-one believed a sub-5% mortgage rate possible. In fact, as recently as the 1980’s, mortgage rates were well over 10%, even topping out at more than 14%!
So. It is important then, to have some perspective on recent real estate interest rate trends. As the rates continue to rise, real estate buyers worry that they will be priced out of the market before they have time to dive in. However, this may not be the case. Yes, real estate interest rates are rising and are expected to continue doing so. However, here are some things to remember before you worry that you might be living with your parents forever.
Real estate interest rates are still very low historically.
The current rates stack up favorably against more than 85% of historical numbers. That’s pretty darn good! Sure, rates have gone up, but they are only high compared to some of the lowest rates ever recorded.
This still might be the best time to buy for years (maybe decades!)
Many potential buyers are being intimidated by the current rise in interest rates. They see a spike and worry that they could buy at the wrong time. However, all signs point to a continued increase in interest rates. This means that while others wait for the rate to come down, you could get into the market before the rates go up! It could be the last time we see rates this low for many years.
Interest rates rise with a booming economy.
Because higher interest rates usually accompany a booming economy, it is possible you might be better equipped to handle the increase because your standard of living has increased. With more money in your pocket, a slightly higher mortgage rate might still be affordable.
What to expect in 2018 and 2019
To make a long story short, few people are predicting anything but higher rates, the question is just how high. Rates have already surpassed predictions made by housing agencies at the end of 2017, and Freddie Mac’s average interest rate clocks in at 4.58%.
Stay Positive and Stay Informed!
As we said earlier, this may be the best time to buy a house for some time. Have a look at the historical numbers and keep your head up. Also, keep yourself informed. Mortgage rates change daily, so it is good to have a general sense of the landscape. Here is a link to a respected site that explains mortgage rates today and tells you what you can expect in the current climate.
Happy shopping, and as always, please don’t hesitate to get in touch with one of our experts if you have any questions!