Rates are slowly drifting upward. They have risen ½ % point since the lows of last fall. People have gotten too used to low rates and don’t get that this is historic and not normal. The federal reserve has been artificially keep in g interest rates low by buying up 10 year bonds. This is the rate that determines mortgage interest rates., Just the announcement that they are planning –just planning- to end this has started the upward spiral. They have not said if they will stop buying all at once or gradually.
Rates were as high as 16% in 1981 and was as high as 8% just 13 years ago so don’t get complacent about this.
If you can qualify, you should buy as many houses as the banks will let you. Find a partner who can qualify if you can’t. Find a partner who has money if you can qualify. JUST DO SOMETHING. You and your partner can buy and hold- either until the next housing top or until your both retire and cash out.
There is still the option of owner finance or subject to but that takes more skill and knowledge. you need a mentor to show you how.
Yes Phyllis, you are correct in part. The Fed is Buying huge chunks of T-Bills (10 year U.S. Gov’t Bonds- about 85 Billion a week), which is keeping Mortgage Interest Rates artificially low. It is a political manipulation of the Interest Rate; not Market Driven as it should be. The real dangerous part is that they can use the Member Banks can use the Bonds Purchased as part of their reserve requirement for liquidity. What will happen when the U.S. can no longer pay its debt? Our GDP to Debt right now is about 60% of what Greece was when the world investors would not longer buy its bonds. Should take till about 2017 for the U.S. to reach similar GDP to debt. Then you will see inflation really kick in and interest rates skyrocket… maybe even hyperinflation??
I agree- we could be in for hard times but inflation is always good for real estate.
Also wanted to know why your chart only went to 2006-2007 or so? What has happened after the 2008 meltdown for the past 4-5 years is hugely important as well with respect to interest rates.
Interest rates went down even lower since 2006 but have gone up one full point since may and will continue higher. It’s the end of the trend and a beginning of a new one.