Low Mortgage Rates Entice Refinancing, But Not New Purchases!
With mortgage rates at or near recent lows, many people are taking advantage of refinancing their existing loans - many opting for a longer term 30 year fixed rate mortgage. This is helpful for the economy because it adds stability to the average homeowners largest expense and typically puts extra cash in their pocket to spend. All in all, this is a positive turn of events.
That being said, new homebuyers are still avoiding real estate like equity investors are avoiding the stock market. People think they can time the bottom, get the best deal ever. It’s just not possible with the exception of statistical luck. Things are on sale America!!! Wake up! We probably won’t see home or equity prices in these ranges in 5 or 10 years, and we’ll all wish we would have scooped up the bargains when we had the chance!
Markets, both real estate and equity, are always forward looking. They don’t care what happened last week, month, or year. So you too must be forward looking, and assess your financial plan and investments in real estate and equities with a longer term view. Will we be better off in three years than we are now??? My best guess is “Yes”. If that’s the case, trying to pick and time the absolute bottom is a futile course of action.
Greg
Tags: equity investment, mortgage rates, new homebuyer, refinance rates