Anorexic George and Good-Bye 5%

Posted Jun 17, 2008 @ 5:58 pm, Viewed by 539 Visitors, Read 547 Times.

            George Washington is starting to look as gaunt as Don Knotts. Some of you younger folk may not even know who that was. (Knotts played Deputy Barney Fife on the “Andy Griffith Show.”) Yes, the one dollar bill is pretty pathetic and puny these days. It looks like George will finally get some help from Dr. Ben Bernanke---perhaps the sooner the better.  Maybe that sounds rather oxymoronic for a realtor to say, but look at our economy, four dollars for a dozen eggs, two dollars a pound for apples, etc. Not to mention gas prices…..

            For the past two months I was amazed at the elastic interest rates and how they sprang back and forth between the five percent and low six percent range on a daily basis. The wise buyer needed to make an agreement with their lender to lock and load their preferred rate if they wanted to land it in that springy loan market. But that seems to have changed.
             Now rates have stayed in the six percent range and seem to be inching their way up. One lender in Roseburg, Oregon has predicted that rates may be as high as 7% by the end of summer. This, on the surface, doesn’t look like good news for the real estate market. It has already been mired in a media blitz of doom and gloom. But perhaps it is the needed medicine for our weakened and suffering dollar. The good news about interest rate increases is that George should get stronger. That should drive the oil prices down and commodities from overseas would also be cheaper for Americans.
            For those of us who have been around the block more than the thirty five and younger crowd, we need to gently remind them that seven percent interest rates are still a good deal. I remember the 18% interest rates of the early 1980’s and the eight and nine percent interest rates of the nineties. ( I thought 8% in 1992 was a great deal !) We have had quite a ride with the five and six percent interest rates, so seven percent may seem like it’s extremely high. Now the younger generation will see some of the fluctuation we saw and learn that interest rates like everything else in life can’t last forever.
            It is still a fantastic time to purchase a home and hopefully the six percent interest will hang around for the summer. But expect that to change. I feel confident in saying NOW is the time to buy. No more rubber band interest rates.
 
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mybrokerdiana

mybrokerdiana  Diana Peterson is a licensed Oregon Broker with Prudential Real Estate Professionals in Roseburg, Oregon.  Douglas County living is the best kept secret in Oregon. Read More

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