Have been in the real estate business for over half my life....since 1978.
When I got into 'the business', mortgage rates were at 12%. My father-in-law told me stories of 5% 30 year fixed and swore they'd be back.
I told him it wasn't going to happen. .....and it wouldn't have happened if they weren't electronically injecting $89 BILLION dollars each month into the markets.
Back in the late 70's they didn't exclude the cost of food and gasoline in arriving at the true inflation number/index, etc.. Truth is, without government intervention, we'd have double digit inflation now and mortgage rates would be AT LEAST 10% fixed.
Back during the Bush economic boom it was the real estate boom that provided the fuel.
People refinanced their homes several times....increasing the loan balance...to take advantage of tax laws. You couldn't write off credit card interest or car loan interest....but if you paid "cash" for the car by borrowing the money from a bank with your home as collateral....it was eligible for 100% write off....as it was treated as mortgage interest paid.
Not just autos....they remodeled their homes...they took vacations....they lived the American Dream.
All because of 'stated income' "liar loans"....banks threw money at people, because the value of the asset covering the loan was rising faster than the total owed.
Mortage rates are artificially low and even with a nominal rate hike to 4.5%.....a rise of a full percent in the past two weeks...for people not to be rushing out there to buy right now is crazy.
Every month from here on out for the foreseeable future, the buyer is going to lose purchasing power.
IOW...if they can go to the limit of $200K for a home in the neighborhood they desire....in another month, the most they'll qualify for may be $150K.
NOTE TO POTENTIAL BUYERS.....RUN!!!!