Some People Believe History Only Goes Back to the Day They Were Born

By
Real Estate Agent with Coldwell Banker D'Ann Harper REALTORS® TX License #0566780

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 torising interest rates 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 Mrs Baird's Breadget 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.



Comments (35)

Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

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.

Mar 29, 2014 11:04 PM
Dianne Goode
Raleigh Cary Realty - Raleigh, NC
Realtor/Broker

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."

Mar 29, 2014 11:04 PM
Jeanne Gregory
RE/MAX Southwest - Sugar Land, TX
The most important home I sell is YOURS!

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.

Mar 29, 2014 11:15 PM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Yep, I experienced the Volker years interest rates both with a commerical loan and personal. 22% and 14.78% ARM.

Mar 30, 2014 02:02 AM
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

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.

Mar 30, 2014 02:07 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

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

Mar 30, 2014 06:25 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

It is good to teach "those" buyers "ancient history"  LOL

Mar 30, 2014 11:40 AM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

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. 

Mar 30, 2014 12:10 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

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. 

Mar 30, 2014 12:23 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

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. 

Mar 30, 2014 12:40 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Ed-Agree.

Joan-Too bad the lessons have to be repeated. 

Mar 30, 2014 12:41 PM
Jimmy Faulkner
Florida. Homes Realty & Mortgage - Wantagh, NY
The Best Of St. Augustine

History always repeats itself. Americans are lazy and they find their history boring. Well they are in for a BIG surprise.

Mar 30, 2014 01:44 PM
ReadySetLoan Team
ReadySetLoan Condo Team LLC - South Windsor, CT
Residential, Commercial & Condo Financing Experts

...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%

Mar 30, 2014 08:40 PM
Chandler Real Estate Liz Harris, MBA
Liz Harris Realty - Chandler, AZ
#ChandlerRealEstateAgent

History is an infinite repetition of cycles. 

Mar 31, 2014 12:15 AM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Jimmy, Jimmy, Jimmy-That's a bit harsh, but true.

Eric-You are correct.

Liz-You nailed it.

Mar 31, 2014 04:14 AM
Karen Mathers - REALTOR®
Keller Williams Vero Beach - Vero Beach, FL
When it Matters, Choose Mathers! 772-532-3221

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.

Mar 31, 2014 04:34 AM
Toni Weidman
Sailwinds Realty - Trinity, FL
20+ Years Selling Homes in New Port Richey, FL

Wayne, they should have had to deal with the 16-18%back in the 70's. Have a great Sunday.

Apr 13, 2014 01:41 AM
Shanna Hall
Real Estate Solutions - Kirkwood, MO
I love selling houses!!!St. Louis, MO 314-703-1311

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!

Apr 15, 2014 01:22 AM
Julie A. Black
KAUAI DREAMS REALTY Kauai Real Property Specialist - Kapaa, HI
CLHMS, CRS, GRI, Realtor, Broker

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.

Apr 15, 2014 09:47 AM
Karyn Smith Woody
Harry Norman Realtors - Blairsville, GA

Interest rates are still very low, too bad more buyers don't recognize that and take advantage of them while they last.

Apr 22, 2014 04:56 AM