“Will interest rates remain low for the foreseeable future?”
In the 31 years of my real estate career I have been asked this question countless times. Though it may seem that predicting interest rates requires a crystal ball, there are a few more reliable indicators to be looked at. I have found that in the months leading up to a presidential election, the interest rates frequently drop and then remain fairly stable until after the election, and even into the new year. Current interest rates are at or near historic lows. For anyone in the market for a new home or even a second home, these current low interest rates may well be the opportunity of a lifetime.
Predicting what will happen in 2021 is a bit more difficult. The long-term effects of the coronavirus pandemic on unemployment and both small and large business is a big unknown. Currently, the Federal Reserve is taking measures to help the economy weather recent events by purchasing bonds and mortgage backed securities. These actions help keep the interest rates low. If this policy continues into the new year it will help to keep interest rates low. Once the economy starts to recover, the Federal Reserve will cut back on purchasing and interest rates will start to climb.
In conclusion, if you are in the market for a new home, now is the time to act.
Kennon Realty, Inc
1015 First Street, Benicia 94510