I said before that these are extraordinary times. This chart shows the bellwether 30 year mortgage rate since 1970. There are several items worth noting. The main point I wish to make here is how low the rate is relative to history! It is under 4% at present! Why aren’t people buying! The chart also shows that technically we are not in a recession (gray areas). The Federal Reserve Economic Data of St. Louis provided the chart and surely they know if we are in a recession or not.
There are some other points of interest on this chart. It shows the recession of 2008-2009 and the post 9-11 recession. It shows the mortgage rate peaks of 1982 that were over 17%. Those were tough times to be selling real estate. It also shows the oil embargo induced recession of 1974.
Considering that mortgage money is available and is at historic lows and that there are many motivated sellers out there right now, why are there not more buyers? Many people are out of work or are underemployed and in no position to be buyers. However, there are many who are economically sound and who could be making huge potential investment gains by buying real estate at this time. I truly believe that many buyers are convinced by the never ending negative press that real estate is horrible and why would anyone ever consider purchasing real estate at this time.
My response to them is simple: buy low and sell high. There is no simpler axiom and one that holds true no matter what sort of economy we are in.
Real estate has always recovered. It is not a matter of if. It is a matter of when. So, from this point forward I do not wish to dwell on the negative. When people come up and ask how the market is, I will reply that it is the absolute ideal time to be a buyer. I think the more positive people can be about real estate, the better off we all will be.