- May 9, 2007
Low interest rates are the primary driver, and we likely won’t see a large change in those for a while. As long as money is cheap to borrow, consumers are going to buy property. Couple that with the pandemic coming to an end, you’ll see more inventory and more buyers enter the market. (It’s a good time to be a real-estate agent!)
I’d say the current boom will continue for a while. For rates to increase, you need strong economic growth and as a side effect inflation. If we see things start to heat up the FED will start to raise rates, and that in turn will cool the housing market. Those increases take years to play out, so we have a long way to go on rates before they become prohibitive to home purchasing.
Also I would ignore current chatter about inflation rising right now, that’s largely a result of lack of production caused by a workforce that’s still sitting at home waiting on the end of the pandemic. I’d bet we’ll hear about rising wages too, as producers get more aggressive in trying to find workers. Overall though this should mellow out over the next year or so as people continue to get vaccinated and Covid fades away.
It’s a good time to buy, build, and especially refinancing an existing loan. If you buy now you may be purchasing at a higher price point, but waiting on a major downturn could take years, and lower rates mean you’ll end up spending less anyway compared to what you might spend when rates are higher.
That's just a drawn out way of saying, "now's the time to buy".