If we had worked Crystal BallsWouldn’t it be easier to predict trends and what the future would bring? However, since most have not found their personal version of a reliable form of these, it might make sense, to better understand some of the signs and omens, which could be helpful, by providing us, with more information, to do! an informed decision! One of these relevant topics is related to mortgage rates and whether, and for how long, these interest rates will remain as low (or close to) as they are today. With that in mind, this article will briefly attempt to consider, examine, review, and discuss some relevant factors to focus on these considerations and assessments.
1. The so-called experts: The curious thing about the experts is that not everyone agrees. When it comes to interest rates, this can be even more, so! The vast majority of economists today, who specialize in this area, believe that we are likely to see little significant change in these rates, at least until after the 2020 election. Their reasoning, it seems, is based on a few factors, which they include political considerations (the president is seeking re-election), fear of risking an economic crisis, etc. However, they also warn us that this may not be the case, if inflation rises suddenly, as it might, and other real and/or perceived risks, etc.
two. External influences: What could be the ramifications of potentially escalating trade wars due to imposed tariffs and/or President Donald Trump’s rhetoric? If the war of wills with China continues for any significant period, it will make everything, such as construction materials, electronics, machinery, etc. more expensive. If Japan and the current administration fail to reach a mutually agreeable agreement, this will create additional tension in the system. What about the impacts of our conflicts with our allies, including NATO, the European Union (EU), the UK (because of BREXIT), etc.?
3. Economic considerations: If trade wars spread, or even if instability is perceived by many, etc., these economic considerations could affect the number of qualified potential homebuyers who are ready, willing and able to seriously consider purchasing a home. it would transform the real estate market, from a seller’s market to a buyer’s market, and this could have an impact/effect on mortgage rates, in part due to supply and demand.
Four. Offer and demand: Like almost every other aspect of the economy, supply and demand also has a major effect on real estate.
Proceed wisely and pay close attention to the effects of a variety of factors on the future level of interest rates, and thus the cost of mortgages. A wise, self-educated consumer is better prepared and ready for any contingency!