Interest rates keep going up on a day to day basis. As I'm writing this, rates are above 4%. We haven't seen that figure in a while!
So before anyone panics, I'd like to go down memory lane to when I purchased my first house. We were given a 10 year mortgage at 10.5% interest with a 20% down payment (the 3 bedroom, 1 bath single level home on a crawl in in a Chicago suburb called Evergreen Park cost $18,000). We made it into a cute little dollhouse. We didn't balk at 10.5% interest - those were the going rates. But look at that low price! In only about 3 years we sold it for $47,500 - those were the days.
I remember when the market went wild when rates fell to 8.5%. It was definitely a seller's market at that time. It was difficult for buyers to get their offer accepted, even at full price. I don't remember what the average home prices were, but definitely lower than today.
With multiple offers, many sellers got more than their asking prices. Some of my buyers either signed a new lease or remained in their current homes. Buyers became worn out and weary.
You'd think agents would love this kind of market, but they end up showing more homes than normal and write up more contracts that don't get accepted. It's not a fun market unless an agent has a lot of listings because sellers are estatic.
Following is a video from Ron Siegel of Ron Siegel Home & Finance Radio
Do you agree with Ron? Here is another take from Forbes - click here. A video commercial will start playing immediately so you might want to turn down your volume if you're someplace public. Here is another interesting read.
Having been licensed since 1983, I've been on a roller coaster of recessions, inflation, high and low rates & home prices, hard-to-get mortgages, and mortgages given to anyone with a pulse. We all knew changes would occur after the election. I wish I had a crystal ball!Posted by Judy Orr on