I’m sure you know that real estate is taking a dip right now. When that happens, it’s hard to remember that real estate is like a roller coaster: what goes down always comes back up. Still, the question on everyone’s mind is,
How long will it take? History might hold an answer…
In 1982, fixed rate mortgage interest peaked around 18% (can you imagine?). Over the next 11 years, rates began a slow decline until 1993, when rates reached 7.5%, similar to today. At that point, rates essentially froze for the next 16 years. It wasn’t until 2009 that rates dropped to 5% and below. If history repeats itself, 1) today’s rates could go much higher, and 2) the decline back to lower rates could take as long as 27 years (the period from 1982 to 2009).
Will this happen? Will rates climb and climb? And will it take 27 years for them to fall again? Your guess is as good as mine. But if I look into my foggy crystal ball, I think rates are likely to stabilize for a while between 6% and 8% (I’m hedging my bets). As inflation gets under control and the world stage calms down, we may even see rates dip below 6% again. But I seriously doubt they’ll get much lower in the next few years.
My sense is that now is a good time to sell a home to get maximum profit. Values are unlikely to rise much more and may fall if rates climb again.
Contact me for a no-obligation listing consultation.