Last year interest rates were falling, and all of us were celebrating!!! Woo Hoo!!! Buyers can lower the cost of homeownership, with the lower prices in most market places, low, low interest rates, wow, the time is now!!!
And, we all agree. Now the interest rates have fallen even lower, and the Fed may get involved with buying mortgage backed securities again, which will further lower interest rates, all good for home buyers!!!
Fast forward with me.... I think we can agree that the future will bring higher interest rates, right? And, with the governments spending, record deficits, we all know that someday we gonna pay, right? I suspect that interest rates will rise over time, 5 or 6 years from now my thinking is that interest rates for home loans will be higher than the long term averages, maybe even as high as 8%, 9% maybe more?
What happens to the resale market,when they think it's time to move up? Sell thier existing home and buy the next one? Now remember, interest rates are significantly higher in my future example, do you think the seller or potential seller may consider NOT selling because they will lose that 3.75% loan????
You betcha, while we're mired in todays market, short sales, REO's we need to look ahead at the risk of an extremely slow real estate market if the interest rates do as I suggest.
My answer (finally) mortgage portability.... let me take my existing mortgage to my next home! Now I admit that on the surface everyone says this is NEVER GOING TO HAPPEN, in fact, I raised this issue at the California Association of REALTORS directors meeting this week (I am a director) and was laughed at, told not to waste my time. Well I'm gonna get that conversation started, and where better to do that, then on ActiveRain,Facebook etc....
This possibility, while far fetched would prevent the slow down in the resale market if I can take my great rate loan with me. It still allows for the lenders to lend money at a higher rate to those who choose to buy, and if fact creates that opportunity by giving the move up buyer the incentive to do so...
I have thought about the details, and will share them with anyone who wants to here more, I wanted to get the talk started, consider that done!