Typical Winter Mortgage Interest Rate Decline Ends As Spring Draws Near - Perhaps Beginning their Upward Trend.
A. Interest Rates Fall in the Fall and Winter.
DEMAND FOR REAL ESTATE AND LOANS TYPICALLY INCREASE IN THE SPRING - AN INCREASE IN HOME PRICES AND INTEREST RATES IS USUALLY EXPECTED.
Interest rates, like the outdoor temperature, rise and fall. Mortgage rates typically follow the basic economic principle of supply and demand. The demand for home buying falls in the Fall and Winter seasons, as the kids start back to school and everyone prepares for the holidays. Because home buying slows and the mortgage business slows during this time, interest rates tend to also decrease during the fall and winter months.
Conversely, demand for mortgage loans increases as home buyers come back to the market in the Springtime, thereby causing an increase in the interest rates through the spring and summer.
B. Home Prices Fall in the Fall and Winter.
REAL ESTATE PRICES FALL IN THE FALL AND WINTER; AND RISE IN THE SPRING AND SUMMER.
Likewise, home prices tend to fall in the fall and winter time and increase in the spring and summer. The chart below shows a clear pattern of falling prices in the fall and winter and increasing prices in the spring and summer selling season.
Equally notable is the long-term, 5-year upward trend in home prices. Is this a sign of what's to come of real estate prices?
C. Home Prices Are Trending Up.
THE HOUSING REBOUND IS WELL ON ITS WAY.
Following the Great Recession, real estate values undoubtedly appear to be on the rise, according to the chart below showing the Home Price Index. Many experts agree this trend will continue as the economy continues to improve, unemployment returns to normal and significantly lower levels, and as banks ease their lending requirements.
San Diego home prices are on the rebound as reported by the
S&P/CASE-SHILLER SAN DIEGO HOME PRICE INDEX. Prices are also on the rise
Nationally.
D. Don't Miss The Boat.
Since entering the real estate business in 1998, I have learned that opportunities come and go. Timing is key!
For home buyers, who want a good price and a good value when buying their home, it is a good idea to buy when prices and interest rates are down.
For real estate investors, who want to buy low and sell high, the same rule applies. And for investors, who want to buy and hold onto their property, again the best time to buy is when prices and interest rates are down, in order to maximize your return on investment.
Real estate buyers, like any buyer of products and services, want a discount. What better time to buy than when both home prices and interest rates are down?
It is important to know that these principles apply during a normal real estate market and that real estate is very localized. This means what is true for one market may not work for another area.
With the real estate rebound in the news more and more everyday, many agree that we are returning to a more "normal" real estate market than we have previously seen in recent years.
Call, Text or Email today to start looking for your new home or investment property.
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Mark Harbaugh, J.D. has been a licensed REALTOR® in California since 1998. He is a real estate Broker, holds a Bachelors Degree and a Law Degree.Since 1998, Mark has been providing expert representation to buyers and sellers of homes, condos, multi-unit properties and multi-million dollar estates. His clients include friends - old and new - colleagues, professional football and basketball players, original founders of Fortune 500 companies and other high-profile personalities, who value their privacy and anonymity. Mark has also consulted Nationally and Internationally with many interested in buying and selling real estate.Mark can be reached at 619-246-2860.Email: markonthemark@gmail.com
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