It's very difficult to know for sure where interest rates are headed, because it is a function of many variables. However, we do know that interest rates have not been this low for decades. Take a look at this historical graph of mortgage rates since 1963:
As you can see, we are at the lowest levels since 1963.
Now, if rates do rise, historically speaking this will usually have a negative impact on real estate prices. Higher interest rates means the buyer's purchasing power diminishes, consequently the buyer must purchase lower priced properties. Since all buyers will suffer this effect nationwide, home prices will typically fall if all else is equal.
Hope that helps.
If you want to meet to discuss further, let me know.
#1 Buyer's Representative
Keller Williams Realty
Please let me know if I may be able to assist you. Good luck.
According to my lenders, the rates generally are up a little higher around this time of the year and then expect them to come back down at the beginning of the year.
Would be happy to speak with you directly and help you in your search!
Jeannine Sharaga (818) 298-7521
Best of Luck,
As for putting more downward pressure on home prices, that's an interesting question. The market is off, by most pundit's estimations, by as much as 30% from the high of mid 2006. So it's losing 7+% per year. How much more could it really lose? Many sellers have lost whatever equity they made during the boom years b/t 2002 and 2006. These sellers are already selling at a loss in many situations. Futher, a considerable number of them were first time buyers, who are already in their home a bit longer than they had expected to be.
Can you put downward pressure, then, on someone who can't afford to get out from underneath a mortgage they're upside down on? I don't know. I'm sure given the opportunity to lose their savings or not sell their home, many people will eventually choose to not sell their home.
There is no crystal ball with which to know for sure. I can tell you this...You'd rather be in a new home, assuming that's something finacially within your power to do, now, while the prices are great and the money borrows cheaply, than wait until the perceived best deal to ever come down the pike materializes. The savings won't be as much as you think they will be, and if you wait too long, you're going to hate yourself for not buying what you want over a small monthly payment difference. Settling for what you don't want is never a good reason to buy anything.
Happy funding, Rudi
Home prices however depend very much on the local market. You can check out my blog to find a local market analysis for areas in the east coast.