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It has actually been our lucky year!  Interest rates fell even lower this year than we would have ever imagined possible, and many buyers were able to buy their dream homes for even lower monthly expenditures.  The record low rates certainly spurred a spring market like we haven’t seen in years.  As we all know, rates spiked up this summer, with the 30 year conforming rate pushing a little too close to 5% for comfort.  Our market slowed significantly in response.  From a rational perspective, this is really very surprising.  Even at 5%, that is an unbelievable rate compared to historic norms.

In the first ten years of the new millennium, we averaged 5.7% on the same loan products.  And in the 80s, when many of today’s homebuyers were born, we averaged 13.99%.  So why then does an increase to 4.75% send buyers to the sidelines?  We are fortunate to be living at a time when we can still buy at these amazing rates. Why wait for the illusive 3% rates to return, which is unlikely to happen?  Inflation will continue to drive prices up, increasing the prices of the homes that are available.  The smart answer is clearly to buy now, even at the slightly higher rates.

Today, however, is your lucky day.  Rates have dropped for the present moment and, with good credit, you have another chance to buy at 4.25%.  Current economic trends suggest that it would be a wise choice to jump on these rates.  No cost refinances are still available to you if the rates should drop further, but at least you are hedging your bets against further increases.  If you have been sitting on the sidelines feeling like you missed your chance, give me a call and we can design a strategic buying plan for you to maximize your buying power over both the short and long terms.