Some People Believe History Only Goes Back to the Day They Were Born
Maybe that's a slight overstatement, but not by much. I saw a headline today, "Mortgage Applications Fall as Interest Rates Pick Up". Fixed interest rates for a thirty-year loan average went from 4.50 percent in January to 4.56 percent last week. This is six basis points. (Source:Mortgage Bankers Association)
I have some clients, millennial-aged, who want to wait for interest rates to decline before getting a home. Of course, that is their right.
In the late 1970's and early '80's would a home buyer been disappointed with a 5 percent mortgage loan? No. But many are conditioned now to the 4 percent loan, or lower and I suppose until rates begin to rise consistently, some will be reluctant to taking the plunge. Especially considering the low rates to which they've become accustomed to during their lifetime.
I used to work in a neighborhood grocery store and I recall a large loaf of Mrs Baird's bread was only 29¢. Today, you'd be hard pressed to get a donut for 29¢. I know a mortgage is a bigger deal than a loaf of bread. As we mature and experience market cycles, many will begin to appreciate the good old days. Sometimes we don't recognize the good old days until they are in the rear view mirror.
Things were happening well before the day we were born.
Wayne, I can remember when interest rates came down to single digits. Home-buyers were elated that the rates came down from double digits rates.
I have those clients too! Historically interest rates should be around 6-7 percent, but an entire generation thinks those numbers would be outrageously high! Oh well. These will be their "Good Old Days."
My daughter is taking a class with students a bit younger than she is. She said the instructor took 20 minutes of class time the other day explaining what a Rolodex was. Guess it's all perception.
Yep, I experienced the Volker years interest rates both with a commerical loan and personal. 22% and 14.78% ARM.
Hi Wayne, I used to be able to buy gas for .17 cents a gallon too. Interest rates are low and right now is the time to take advantage of them for sure! They may not stay low for ever.
Those are the same clients that thought they should wait for it to get lower back when they hovered under 4%. That train has left the station
Judi-I agree.
Jennifer-Yes, these will be the good old days in the future.
Wanda-not likely to see a price increase like that in this area, but rates will be going up.
Bob-Agree the eighties were brutal when it come to interest rates.
Jane-Right you are.
Karen-As I recall the rate of increase was pretty dramatic on a month to month basis.
Chuck-Experience is the best teacher.
Mike- Me too. Comes from experience I guess.
Michael-Those were happy days.
Dianne-You are so right.
Jeanne-If the old Rolodex was that much of relic of the past the typewriter must have really been something.
Joe-I hope to never see those rates again for home mortgages.
Sarah and Lester-I too remember sometimes there were gas wars in Texas. Stations did the opposite of what they do today. There was competition to reduce rates and drop cents to undercut the competition. Those were the days.
History always repeats itself. Americans are lazy and they find their history boring. Well they are in for a BIG surprise.
...and stamps and candy bars were a quarter when I was a kid, Wayne. It is silly to wait for interest rates to go down especially since the FED has already stated that they intend to increase the FED Funds rate in the near future. They will certainly regret not buying when rates are again 6%
Jimmy, Jimmy, Jimmy-That's a bit harsh, but true.
Eric-You are correct.
Liz-You nailed it.
I have to laugh at the donut reference as I think they're about 79 cents at the local shop! In regards to rates, it is not just mortgages that some people continue to hold off for the "better deal", I have seen "dream homes" lost thinking they could hold out for a lower price negotiation.
Wayne, they should have had to deal with the 16-18%back in the 70's. Have a great Sunday.
Wayne- you make a lot of excellent points! My first mortgage was at a 7.5% interest rate! And that was really good at the time! People do not realize how good it is right now!
Luckily interest rates are still low. If they do reach the rates of the 70's or even 80's, homeowners, buyers and agents will all be having a hard time.
Interest rates are still very low, too bad more buyers don't recognize that and take advantage of them while they last.
Comments (35)Subscribe to CommentsComment