Just When You Thought The Housing Market Couldn’t Get Any Hotter…


The headlines have been everywhere, in every paper, money magazine, and Internet blog- -housing is sizzling. One headline read, “Disappearing Act, Mission Nearly Impossible This Spring: Finding A Home To Buy.” Or how about, “Growing Hotter, Southland Home Buyers Face High Demand And A Short Supply.” The message is ubiquitous, and can make a person feel out of step and a dollar short if they can’t find a home to buy. Fear not, this article is here to assure that real estate markets are cyclical, even if they don’t seem so at the time, in retrospect, they always are.

Meaning? Supply will come back; the pressing question that burns at most buyers is that when it does come back, will low interest rates be right there with it? No crystal ball here, but historically, rates will rise. We all know that they have been kept so low for so long, through largely artificial means, and the current administration, and the Feds have indicated rises are imminent.

Though that rate is not tied to long term interest rates, in a roundabout way it will drive them up. Therefore each family ought to frankly discuss their situation and whether now is the time to buy or not. Many times cost versus price has been discussed, and since most people stay in their home 9 years (last National Association of Realtors survey), cost may be the most pressing and right now your money can buy more home.

Will there be a price correction? History says yes; what is not known is how much or how long. But one thing remains constant, and that is your house payment as compared to rent, which will not stay the same. In fact, rent projections say to buckle up, it’s going to be a bumpy ride, up and up. Locking into a 30 year fixed rate loan is one of the single best ways to save money and build wealth by being the fortunate recipient of equity building and appreciation. A dynamite combination that exists only in real estate thanks to leverage. Nowhere else can so little money buy so much future peace of mind.