OPPORTUNITY KNOCKING
U.S. Median Home Price
$260
U.S. home prices continue to hit new highs (10-month moving average)
$240
$220
$200
$180
$160
$140
Source: Bloomberg
2011 2009 2007 2005 2003 2001
2019 2017 2015 2013
In this century, mortgage rates bottomed out in 2012 and 2016 at around the same 3.375% level Jeff locked in for his client. Today, mortgages are still in the 3% to 4% range, but time is running out. So what should you do? You should do the obvious thing in this case... and refinance your house – right now . Better yet, consider buying a house... You’re probably thinking, “ Are you kidding, Steve? Don’t you know that house prices are way up?” Sure I do. The median existing home price in the U.S. is about $278,000 today. That’s just shy of a recent high of $289,000... even higher than we saw at the peak of the housing bubble a dozen years ago. Take a look at the above chart of the 10-month moving average. We all know prices are up. But here’s the important thing – the big takeaway:
WHY THE CRAZY MOVE IN INTEREST RATES CREATES POWERFUL OPPORTUNITIES IN HOUSING “How are things, Jeff? I bet business is good with these low interest rates... “ Jeff is a friend I’ve known for many years. He also happens to be a local mortgage banker. A few months ago, we were both eating dinner at the same restaurant. “Business is great,” he answered. “I just locked in a 30-year mortgage today for a client – at a rate of 3.375%.” “3.375%!” I said. “Lucky client...” To see just how crazy this is, you need to understand one thing... That number is near the all-time record low for a mortgage rate – in U.S. history. Seriously... Looking back at the last century, the best mortgage rate you could have gotten for a house was just under 5% – back in the late 1940s.
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October 2019
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