Part 2 | Cheap Money – Interest Rates & Loans
Interest rates come in a close 2nd after pricing in our quest to find “What’s right with the real estate market”. When you apply for a loan the amount you pay to borrow the money from a bank, the interest rate, has NEVER BEEN LOWER than it is currently. As you can see from the chart below, interest rates have been falling for the past 2 decades.
We are at levels that we’ve never seen before and we don’t know how long they will stay this low. There are many variables in the economy that determine the cost to borrow money and rates can move rapidly in either direction. We should recognize that being able to lock in a loan at these low levels is a positive. We should also recognize that the combination of lower prices and ultra-low interest rates is offering an opportunity not seen in San Diego for many years.
A small increase in the interest rates can increase your payments by a couple hundred dollars a month and prevent you from having a mortgage payment that “won’t keep you up at night”. So, when you’re making a list of Pros & Cons you now have at least 2 for the Pro side – Prices & Rates.
-Part 2 of a 5 part series-
