They both like to yell, “HIKE!”🤣
In all seriousness, the interest rates have been creeping up, leaving some buyers questioning if it is the right time to buy. Here is what Ron Erdmann, Senior VP of Lending at Guaranteed Rate, has to say. “For the last two years the Fed has been on an aggressive rate increase cycle to increase mortgage rates to curb inflation. When inflation subsides, it is likely rates will decrease. In the mean-time, historically-speaking, real estate is one of the absolutely best hedges against inflation there is”…
Keep reading for Ron’s full article….
In December 2018, the 30 year mortgage rates had just risen above 5% for the first time in a decade. The media and the Fed and the economic “experts” all predicted multiple rate hikes in 2019 and many predicted rates would be in the 7’s by mid 2019. The experts predicted a housing crash. Scott and the Oyler Group asked me to do a video with him giving my opinion on housing.
I said my advice has been the same for 15+ years. If you fall in love with a house in a great neighborhood and if you can afford the monthly payments and if you think you’ll be there for a few years or more, than buy the house. If rates go up even higher then you’ll be glad you locked in the rates when you did. If rates go down, then you can hopefully refinance to a lower rate in the future.
So we helped a lot of buyers purchase homes in Dec 2018 at 4.99% -5.125% rates at 2018 prices. Not only did rates “not” go up in 2019 as the experts predicted, but rates fell. The Fed cut rates. The stock market had a banner year and we refinanced clients from 4.99% down to 4.3% with minimal fees and then down to 3.8% with minimal fees and then many clients again with rates in the high 2’s. So anybody who bought at 2018 prices and who was able to refinance at a rate in the 2’s is extremely happy right now. It might not have “felt” that way when they bought the house – and I’m sure they were nervous and questioning whether or not they should wait – but fortunately they didn’t. It’s extremely hard to time the real estate market. It’s near impossible to get “in” at the right time and then “out” at the right time and then back “in” at the right time.
For the last two years the Fed has been on an aggressive rate increase cycle to increase mortgage rates to curb inflation. When inflation subsides, it is likely rates will decrease. In the mean-time, historically-speaking, real estate is one of the absolutely best hedges against inflation there is!
