Updated 7/12/2022, Although interest rates have pretty much doubled since last year they have currently dropped a tiny bit.
Low or no income qualifying loans, ARMs (adjustable-rate mortgages) that offer a discount for the first few years to help people qualify, 40 year mortgages and even interest only loans, are all coming back!. (Just like the good old days of the early 2000’s)
The Federal Reserve Bank tries to keep a balance between stimulating the economy by lowering interest rates and curbing inflation by raising interest rates. This year the Federal Reserve Bank, where the US gets its currency, has doubled interest rates to slow the rapid inflation brought on by government borrowing. Most people have experienced a 15%+ increase in prices of housing, fuel, food and tangible goods over the past 12 months.
Most economists believe government borrowing spurs inflation, because they ALWAYS parallel! See Government Borrowing In Real Time. Interest rates will continue to rise until inflation drops to around 3%. Then interest rates could go down a little.
I think interest rates will level off or drop a tad in the latter part of this year from the summer highs. It is traditional to bolster the economy during election times to support the incumbent party and this November has mid-term elections.
This is just my opinion. We’ll look back next year to see if I was correct.
If you have any questions, feel free to call me. Alex Schauffert 707 332 8301
If you’d like to receive updates via email, please join the Real Estate Trends List now and I’ll send you the next update.