ARE THE AWESOME INTEREST RATES GONE FOREVER? In my industry there is a lot of discussion these days about how the interest rates in December have escalated so . We were seemingly stuck in a rut, rates were low (and they still are, really), the really important things like housing and employment were not improving, so there was not a lot of fear of rates rising. Well, at least not by a lot.
Now here we sit a few weeks later and oh, if only we had a crystal ball. That is always the case with long term interest rates. In October we were seeing the best rates, each month it seemed long term interest rates were either improving, or at least not getting worse.
When we have great rates for such a long time, then everyone gets a bit greedy. The borrowers don't lock in rates because there is that chance they will get better. Professionals who try to predict what may happen get caught up in the "news" that may go one way or the other.
Many people missed the boat, - maybe - who knows. Every day is a new day. The thing is that borrowers need to analyze carefully what they have and what they can get on any given day and know when to say I'm satisfied.
So many factors affect long term rates; Who is buying securities, how much, how fast. Unemployment numbers, housing sales and starts. Consumer sentiment. The list goes on and on and it seems every time you turn around it is something new that was not taken into consideration that throws a wrench in things, or a certain action does not produce the expected reaction.
Even a lot of the experts missed the recent rise in rates. All the data they watch would not have predicted that.
Bottom line. as a borrower, if you gamble on a better rate, just know it may not go your way. In the grand scheme of things it may not make that much difference. And keep in mind the long term rates we have now are way better than one would have imagined a couple of years ago. Combine this with the fact homes are selling for far less, it is a wonderful time to buy a home.
Comments(0)